<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1996
REGISTRATION NO. 333-3378
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT
NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
VIRUS RESEARCH INSTITUTE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 2836 22-3098869
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
61 MOULTON STREET
CAMBRIDGE, MASSACHUSETTS 02138
(617) 864-6232
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
J. BARRIE WARD, PH.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
VIRUS RESEARCH INSTITUTE, INC.
61 MOULTON STREET
CAMBRIDGE, MASSACHUSETTS 02138
(617) 864-6232
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
SHELDON E. MISHER, ESQ. DAVID E. REDLICK, ESQ.
STEVEN A. FISHMAN, ESQ. HALE AND DORR
BACHNER, TALLY, POLEVOY & MISHER LLP 60 STATE STREET
380 MADISON AVENUE BOSTON, MASSACHUSETTS 02109
NEW YORK, NEW YORK 10017 (617) 526-6000
(212) 687-7000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
ITEM 16. EXHIBITS
<C> <S>
1.1. Form of Underwriting Agreement*
3.1. Fifth Restated Certificate of Incorporation, as amended*
3.2 Form of Third Certificate of Amendment to Fifth Restated Certificate of
Incorporation*
3.3. By-laws, as amended*
3.4. Form of Fourth Amendment to Fifth Restated Certificate of Incorporation*
3.5. Form of Amendment to By-laws*
5.1. Opinion of Bachner, Tally, Polevoy & Misher regarding legality of securities
offered*
10.1 1992 Equity Incentive Plan, as amended*
10.2 Form of Stock Option Agreement*
10.3 Lease dated December 1, 1991, between the Registrant and Moulton Realty Company.*
10.4 Series D Convertible Preferred Stock Purchase Agreement dated December 20, 1994*
10.5 Series D Convertible Preferred Stock Purchase Agreement dated January 5, 1996*
10.5(a) Form of Modification Agreement to Series D Convertible Preferred Stock Purchase
Agreements*
10.6 Second Amended and Restated Stockholders Agreement dated April 8, 1994 and
amendments.*
10.6(a) Form of Consent and Agreement to Amend Second Amended and Restated Stockholders
Agreement*
10.7 Form of Warrant Agreement dated as of February 10, 1994.*
10.8 Form of Warrant to purchase shares of Common Stock dated February 10, 1994 issued
pursuant to Exhibit 10.7.*
10.9 Loan Agreement dated as of September 14, 1995 between the Registrant and certain
stockholders, with forms of Convertible Promissory Note and Warrant Agreement
attached.*
10.10 Form of Warrant to purchase shares of Common Stock dated December 14, 1995 issued
pursuant to Exhibit 10.9.*
10.11 Warrants issued to Comdisco, Inc. ("Comdisco") to purchase shares of Series A
Preferred Stock and Series C Preferred Stock.*
10.12 Master Lease Agreement dated as of August 31, 1992, between the Registrant and
Comdisco.*
10.13 License Agreement, dated as of May 1, 1992, between the Registrant and the
President and Fellows of Harvard College ("Harvard") as amended.+*
10.14 License and Clinical Trials Agreement, dated as of February 27, 1995, between the
Registrant and The James N. Gamble Institute of Medical Research (assigned to
Children's Hospital of Cincinnati).+*
10.15 License Agreement, dated as of March 12, 1995, between the Registrant, Harvard and
Dana-Farber Cancer Institute.+*
10.16 License Agreement, dated December 6, 1991, between the Registrant and
Massachusetts Institute of Technology.+
10.17 License Agreement, dated March 8, 1995, between the Registrant and The Penn State
Research Foundation.+*
10.18 License Agreement, dated as of December 13, 1994, between the Registrant and
Pasteur Merieux Serums & Vaccins S.A. ("Pasteur Merieux").+
10.19 License Agreement, dated as of August 2, 1995, between the Registrant and Pasteur
Merieux.+
10.20 Option Agreement, dated as of November 22, 1995, among the Registrant, Pasteur
Merieux, OraVax, Inc., OraVax Merieux Co. and Merieux OraVax S.N.C. relating to
PCPP.+*
10.21 Option Agreement dated as of November 22, 1995 among the Registrant, Pasteur
Merieux, OraVax, Inc., OraVax Merieux Co. and Merieux OraVax S.N.C. relating to
VibrioVec.+*
10.22 Research Agreement, dated January 10, 1996, between the Registrant and CSL
Limited.+*
</TABLE>
II-1
<PAGE> 3
<TABLE>
<C> <S>
10.23 Collaborative Research and License Agreement, dated as of June 22, 1995, between
the Registrant and SmithKline Beecham plc.+
10.24 Research and Development License and Option for Commercial License Agreement,
dated as of December 28, 1995, between the Registrant and Chiron Corporation.+*
10.25 Warrants to purchase Common Stock issued to Silicon Valley Bank.*
11.1 Computation of Pro Forma Loss Per Share*
24.1 Consent of Bachner, Tally, Polevoy & Misher LLP (to be included in its opinion
filed as Exhibit 5.1 hereto)*
24.2 Consent of Richard A. Eisner & Company, LLP -- Included on Page II-6*
24.3 Consent of Carella, Byrne, Baine, Gilfillan, Cecchi, Stewart & Olstein -- Included
on Page II-8*
24.4 Consent of Hyman, Phelps & McNamara, P.C.*
24.5 Consent of Fish & Richardson, P.C.*
24.6 Consent of Dr. Volker Vossius -- Included on Page II-7*
25.1 Power of Attorney*
27.1 Financial Data Schedule*
</TABLE>
- ---------------
* Previously filed
+ Subject to confidential treatment request
II-2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cambridge, Commonwealth
of Massachusetts on the 28th day of May, 1996.
VIRUS RESEARCH INSTITUTE, INC.
By: J. BARRIE WARD, PH.D.
---------------------------------
J. Barrie Ward, Ph.D.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------- ---------------
<C> <S> <C>
/s/ J. BARRIE WARD, PH.D. Chief Executive Officer and May 28, 1996
- ------------------------------------------ Chairman of the Board (principal
J. Barrie Ward, Ph.D. executive officer)
/s/ WILLIAM A. PACKER President, Chief Financial Officer May 28, 1996
- ------------------------------------------ and Director (principal financial
William A. Packer officer)
/s/ DAVID H. RAMSDELL Vice President-Finance May 28, 1996
- ------------------------------------------ (principal accounting officer)
David H. Ramsdell
/s/ * Director May 28, 1996
- ------------------------------------------
Costas E. Anagnostopoulos
/s/ * Director May 28, 1996
- ------------------------------------------
John W. Littlechild
/s/ * Director May 28, 1996
- ------------------------------------------
Alan M. Mendelson
/s/ J. BARRIE WARD, PH.D.
- ------------------------------------------
J. Barrie Ward, Ph.D.
*As Attorney-in-fact
</TABLE>
II-3
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
EXHIBIT NO.
- ------- ----
<C> <S> <C>
1.1. Form of Underwriting Agreement*
3.1. Fifth Restated Certificate of Incorporation, as amended*
3.2 Form of Third Certificate of Amendment to Fifth Restated Certificate of
Incorporation*
3.3. By-laws, as amended*
3.4. Form of Fourth Amendment to Fifth Restated Certificate of Incorporation*
3.5. Form of Amendment to By-laws*
5.1. Opinion of Bachner, Tally, Polevoy & Misher regarding legality of
securities offered*
10.1 1992 Equity Incentive Plan, as amended*
10.2 Form of Stock Option Agreement*
10.3 Lease dated December 1, 1991, between the Registrant and Moulton Realty
Company.*
10.4 Series D Convertible Preferred Stock Purchase Agreement dated December 20,
1994*
10.5 Series D Convertible Preferred Stock Purchase Agreement dated January 5,
1996*
10.5(a) Form of Modification Agreement to Series D Convertible Preferred Stock
Purchase Agreements*
10.6 Second Amended and Restated Stockholders Agreement dated April 8, 1994 and
amendments.*
10.6(a) Form of Consent and Agreement to Amend Second Amended and Restated
Stockholders Agreement*
10.7 Form of Warrant Agreement dated as of February 10, 1994.*
10.8 Form of Warrant to purchase shares of Common Stock dated February 10, 1994
issued pursuant to Exhibit 10.7.*
10.9 Loan Agreement dated as of September 14, 1995 between the Registrant and
certain stockholders, with forms of Convertible Promissory Note and Warrant
Agreement attached.*
10.10 Form of Warrant to purchase shares of Common Stock dated December 14, 1995
issued pursuant to Exhibit 10.9.*
10.11 Warrants issued to Comdisco, Inc. ("Comdisco") to purchase shares of Series
A Preferred Stock and Series C Preferred Stock.*
10.12 Master Lease Agreement dated as of August 31, 1992, between the Registrant
and Comdisco.*
10.13 License Agreement, dated as of May 1, 1992, between the Registrant and the
President and Fellows of Harvard College ("Harvard") as amended.+*
10.14 License and Clinical Trials Agreement, dated as of February 27, 1995,
between the Registrant and The James N. Gamble Institute of Medical
Research (assigned to Children's Hospital of Cincinnati).+*
10.15 License Agreement, dated as of March 12, 1995, between the Registrant,
Harvard and Dana-Farber Cancer Institute.+*
10.16 License Agreement, dated December 6, 1991, between the Registrant and
Massachusetts Institute of Technology.+
10.17 License Agreement, dated March 8, 1995, between the Registrant and The Penn
State Research Foundation.+*
10.18 License Agreement, dated as of December 13, 1994, between the Registrant
and Pasteur Merieux Serums & Vaccins S.A. ("Pasteur Merieux").+
10.19 License Agreement, dated as of August 2, 1995, between the Registrant and
Pasteur Merieux.+
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
EXHIBIT NO.
- ------- ----
<C> <S> <C>
10.20 Option Agreement, dated as of November 22, 1995, among the Registrant,
Pasteur Merieux, OraVax, Inc., OraVax Merieux Co. and Merieux OraVax S.N.C.
relating to PCPP.+*
10.21 Option Agreement dated as of November 22, 1995 among the Registrant,
Pasteur Merieux, OraVax, Inc., OraVax Merieux Co. and Merieux OraVax S.N.C.
relating to VibrioVec.+*
10.22 Research Agreement, dated January 10, 1996, between the Registrant and CSL
Limited.+*
10.23 Collaborative Research and License Agreement, dated as of June 22, 1995,
between the Registrant and SmithKline Beecham plc.+
10.24 Research and Development License and Option for Commercial License
Agreement, dated as of December 28, 1995, between the Registrant and Chiron
Corporation.+*
10.25 Warrants to purchase Common Stock issued to Silicon Valley Bank.*
11.1 Computation of Pro Forma Loss Per Share*
24.1 Consent of Bachner, Tally, Polevoy & Misher LLP (to be included in its
opinion filed as Exhibit 5.1 hereto)*
24.2 Consent of Richard A. Eisner & Company, LLP -- Included on Page II-6*
24.3 Consent of Carella, Byrne, Baine, Gilfillan, Cecchi, Stewart &
Olstein -- Included on Page II-8
24.4 Consent of Hyman, Phelps & McNamara, P.C.*
24.5 Consent of Fish & Richardson, P.C.*
24.6 Consent of Dr. Volker Vossius -- Included on Page II-7*
25.1 Power of Attorney*
27.1 Financial Data Schedule*
</TABLE>
- ---------------
* Previously filed
+ Subject to confidential treatment request
<PAGE> 1
EXHIBIT 10.16
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by [****], have been
separately filed with the Commission.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
LICENSE AGREEMENT
(EXCLUSIVE)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
P R E A M B L E
ARTICLES
1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2 GRANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3 DUE DILIGENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4 ROYALTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5 REPORTS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6 PATENT PROSECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7 INFRINGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8 PRODUCT LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9 EXPORT CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10 NON-USE OF NAMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
11 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
12 DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
13 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
14 PAYMENTS, NOTICES AND OTHER COMMUNICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
15 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
<PAGE> 3
This Agreement is made and entered into this _________ day of
___________, 199__, (the "Effective Date") by and between MASSACHUSETTS
INSTITUTE OF TECHNOLOGY, a corporation duly organized and existing under the
laws of the Commonwealth of Massachusetts and having its principal office at 77
Massachusetts Avenue, Cambridge, Massachusetts 02139, U.S.A. (hereinafter
referred to as "M.I.T."), and VIRUS RESEARCH INSTITUTE, INC., a corporation
duly organized under the laws of Massachusetts and having its principal office
at 840 Memorial Drive Cambridge, MA 02139 (hereinafter referred to as
"LICENSEE").
W I T N E S S E T H
WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as
later defined herein) and has the right to grant licenses under said PATENT
RIGHTS, subject only to a royalty-free, nonexclusive license heretofore granted
to the United States Government;
WHEREAS, portions of the M.I.T. PATENT RIGHTS are jointly
owned by M.I.T. and Pennsylvania Research Corporation (hereinafter referred to
as "PRC") and PRC has granted M.I.T. exclusive rights to license PRC's rights
in such PATENT RIGHTS in the medical fields of use according to the
institutional agreement dated December 3, 1990 and appended hereto as Appendix
C.
WHEREAS, M.I.T. desires to have the PATENT RIGHTS utilized in
the public interest and is willing to grant a license thereunder;
WHEREAS, LICENSEE has represented to M.I.T., to induce M.I.T.
to enter into this Agreement, that LICENSEE is experienced in the development
of products similar to the LICENSED PRODUCT(s) (as later defined herein) and/or
the use of the LICENSED PROCESS(es) (as later defined herein) and that it shall
commit itself to a thorough, vigorous and diligent program of exploiting the
PATENT RIGHTS so that public utilization shall result therefrom; and
WHEREAS, LICENSEE desires to obtain a license under the PATENT
RIGHTS upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as follows:
<PAGE> 4
ARTICLE I - DEFINITIONS
For the purposes of this Agreement, the following words and
phrases shall have the following meanings:
1.1 "LICENSEE" shall include a related company of VIRUS
RESEARCH INSTITUTE, INC., the voting stock of which is directly or indirectly
at least fifty percent (50%) owned or controlled by VIRUS RESEARCH INSTITUTE,
an organization which directly or indirectly controls more than fifty percent
(50%) of the voting stock of VIRUS RESEARCH INSTITUTE and an organization, the
majority ownership of which is directly or indirectly under common control with
VIRUS RESEARCH INSTITUTE, INC.
1.2 "PATENT RIGHTS" shall mean all of the following
M.I.T. intellectual property:
(a) the United States and foreign patents and/or patent
applications listed in Appendices A and B;
(b) United States and foreign patents issued from the
applications listed in Appendices A and B and from
divisionals and continuations of these applications;
(c) claims of U.S. and foreign continuation-in-part
applications, and of the resulting patents, which are
directed to subject matter specifically described in
the U.S. and foreign applications listed in
Appendices A and B;
(d) claims of all foreign patent applications, and of the
resulting patents, which are directed to subject
matter specifically described in the United States
patents and/or patent applications described in (a),
(b) or (c) above; and
(e) any reissues of United States patents described in
(a), (b) or (c)above.
1.3 A "LICENSED PRODUCT" shall mean any product or part
thereof which:
(a) is covered in whole or in part by an issued,
unexpired claim or a pending claim which has not been
declared invalid by a court of Competent Jurisdiction
from which there is no appeal or from which no appeal
is taken contained in the PATENT RIGHTS in the
country in which any such product or part thereof is
made, used or sold; or
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<PAGE> 5
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
(b) is manufactured by using a process or is employed to
practice a process which is covered in whole or in
part by an issued, unexpired claim or a pending claim
which has not been declared invalid by a court of
Competent Jurisdiction from which there is no appeal
or from which no appeal is taken contained in the
PATENT RIGHTS in the country in which any LICENSED
PROCESS is used or in which such product or part
thereof is used or sold.
1.4 A "LICENSED PROCESS" shall mean any process which is
covered in whole or in part by an issued, unexpired claim or a pending claim
which has not been declared invalid by a court of Competent Jurisdiction from
which there is no appeal or from which no appeal is taken contained in the
PATENT RIGHTS.
1.5 "NET SALES" shall mean LICENSEE's (and its
sublicensees') billings for LICENSED PRODUCTS and LICENSED PROCESSES produced
hereunder less the sum of the following:
(a) discounts allowed in amounts customary in the trade;
(b) sales, tariff duties and/or use taxes directly
imposed and with reference to particular sales;
(c) outbound transportation prepaid or allowed; and
(d) amounts allowed or credited on returns.
No deductions shall be made for commissions paid to
individuals whether they be with independent sales agencies or regularly
employed by LICENSEE and on its payroll, or for cost of collections. LICENSED
PRODUCTS shall be considered "sold" when billed out or invoiced.
1.6 "TERRITORY" [****]
1.7 "FIELD OF USE" shall mean non-injected delivery of
vaccines and immunotherapeutics to all mucosal surfaces (including oral
delivery).
-3-
<PAGE> 6
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
ARTICLE 2 - GRANT
2.1 M.I.T. hereby grants to LICENSEE the right and
license to make, have made, use, lease and sell the LICENSED PRODUCTS and to
practice the LICENSED PROCESSES in the TERRITORY for the FIELD OF USE to the
end of the term for which the PATENT RIGHTS are granted unless this Agreement
shall be sooner terminated according to the terms hereof.
2.2 LICENSEE agrees that LICENSED PRODUCTS leased or sold
in the United States shall be manufactured substantially in the United States.
2.3 [****]
2.4 M.I.T. reserves the right to practice under the
PATENT RIGHTS for noncommercial research purposes.
2.5 In addition to the options granted in the Sponsored
Research Agreement of Appendix C, M.I.T. further grants to LICENSEE a first
option to an exclusive license in the Field of Use to other new inventions
which:
(a) [****]
(b) [****]
(c) [****]
This option for any new invention shall be exercisable within
six months after the date on which M.I.T. notifies LICENSEE that the new
invention has been reported, under the following terms:
(i) [****]
(ii) [****]
(iii) [****]
(iv) [****]
-4-
<PAGE> 7
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
2.6 LICENSEE shall have the right to enter into
sublicensing agreements for the rights, privileges and licenses granted
hereunder.
2.7 LICENSEE agrees that any sublicenses granted by it
shall provide that the obligations to M.I.T. of Articles 2, 5, 7, 8, 9, 10,
12, 13, and 15 of this Agreement shall be binding upon the sublicensee as if it
were a party to this Agreement. LICENSEE further agrees to attach copies of
these Articles to sublicense agreements.
2.8 LICENSEE agrees to forward to M.I.T. a copy of any
and all sublicense agreements promptly upon execution by the parties.
2.9 LICENSEE shall not receive from sublicensees anything
of value in lieu of cash payments in consideration for any sublicense under
this Agreement, without the express prior written permission of M.I.T.
2.10 The license granted hereunder shall not be construed
to confer any rights upon LICENSEE by implication, estoppel or otherwise as to
any technology not specifically set forth in Appendix A, Appendix B or Section
2.5 hereof.
ARTICLE 3 - DUE DILIGENCE
3.1 LICENSEE shall use its best efforts to bring one or
more LICENSED PRODUCTS or LICENSED PROCESSES to market through a thorough,
vigorous and diligent program for exploitation of the PATENT RIGHTS and to
thereafter continue active, diligent marketing efforts for one or more LICENSED
PRODUCTS or LICENSED PROCESSES throughout the life of this Agreement. [****]
to the bringing to market of a LICENSED PRODUCT or LICENSED PROCESS throughout
the term of this Agreement until the first commercial sale of a LICENSED
PRODUCT or commercial use of a LICENSED PROCESS.
3.2 In addition, LICENSEE shall adhere to the following
milestones:
(a) [****]
(b) [****]
-5-
<PAGE> 8
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
3.3 LICENSEE's failure to perform in accordance with
Paragraphs 3.1 and 3.2 above shall be grounds for M.I.T. to terminate this
Agreement pursuant to Paragraph 13.3 hereof.
ARTICLE 4 - ROYALTIES
4.1 For the rights, privileges and license ranted
hereunder, LICENSEE shall pay royalties to M.I.T. in the manner hereinafter
provided to the end of the term of the PATENT RIGHTS or until this Agreement
shall be terminated:
a) [****]
b) [****]
(c) [****]
(d) [****]
4.2 [****]
4.3 [****]
4.4 If LICENSEE sells LICENSED PRODUCTS to or under
arrangement with a governmental or non-profit organization (such as the World
Health Organization), and if such sales [****]
4.5 No multiple royalties shall be payable because any
LICENSED PRODUCT, its manufacture, use, lease or sale are or shall be covered
by more than one PATENT RIGHTS patent application or PATENT RIGHTS patent
licensed under this Agreement.
4.6 Except as provided in Section 4.7 below, royalty
payments shall be paid in United States dollars in Cambridge, Massachusetts, or
at such other place as M.I.T. may reasonably designate consistent with the laws
and regulations controlling in any foreign country. If any currency conversion
shall be required in connection with the payment of royalties hereunder, such
conversion shall be made by using the exchange rate prevailing at the Chase
-6-
<PAGE> 9
Manhattan Bank (N.A.) on the last business day of the calendar quarterly
reporting period to which such royalty payments relate.
4.7 If by law, regulation, or fiscal policy of a
particular country, conversion into United States dollars or transfer of funds
of a convertible currency to the United States is restricted or forbidden,
LICENSEE shall give M.I.T. prompt notice in writing and shall pay the royalty
and other amounts due through such means or methods as are lawful in such
country as M.I.T. may reasonably designate. Failing the designation by M.I.T.
of such lawful means or methods within thirty (30) days after such notice is
given to M.I.T., LICENSEE shall deposit such royalty payment in local currency
to the credit of M.I.T. in a recognized banking institution designated by
M.I.T., or if none is designated by M.I.T. within the thirty (30) day period
described above, in a recognized banking institution selected by LICENSEE and
identified in a written notice to M.I.T. by LICENSEE, and such deposit shall
fulfill all obligations of LICENSEE to M.I.T. with respect to such royalties.
ARTICLE 5 - REPORTS AND RECORDS
5.1 LICENSEE shall keep full, true and accurate books of
account containing all particulars that may be necessary for the purpose of
showing the amounts payable to M.I.T. hereunder. Said books of account shall be
kept at LICENSEE's principal place of business or the principal place of
business of the appropriate division of LICENSEE to which this Agreement
relates. Said books and the supporting data shall be open at all reasonable
times for five (5) years following the end of the calendar year to which they
pertain, to the inspection of M.I.T. or its Agents for the purpose of verifying
LICENSEE's royalty statement or compliance in other respects with this
Agreement. Should such inspection lead to the discovery of a greater than ten
percent (10%) discrepancy in reporting, LICENSEE agrees to pay the full cost of
such inspection.
5.2 Prior to the first calendar quarter in which Net
Sales occur, LICENSEE shall provide M.I.T. with an annual summary of
LICENSEE's efforts during the preceding year to bring to market a LICENSED
PRODUCT or LICENSED PROCESS. Beginning with the first calendar quarter in which
Net Sales occur, LICENSEE, within ninety (90) days after March 31, June 30,
September 30 and December 31, of each year, shall in place of such annual
reports
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<PAGE> 10
deliver to M.I.T. true and accurate reports, giving such particulars of the
business conducted by LICENSEE and its sublicensees during the preceding
three-month period under this Agreement as shall be pertinent to a royalty
accounting hereunder. These quarterly reports shall include at least the
following:
(a) number of LICENSED PRODUCT manufactured and sold by
LICENSEE and all sublicensees;
(b) total billings for LICENSED PRODUCTS sold by LICENSEE
and all sublicensees;
(c) accounting for all LICENSED PROCESSES used or sold by
LICENSEE and all sublicensees;
(d) deductions applicable as provided in Paragraph 1.5;
(e) total royalties due; and
(f) names and addresses of all sublicensees of LICENSEE.
5.3 With each such report submitted, LICENSEE shall pay
to M.I.T. the royalties due and payable under this Agreement. If no royalties
shall be due, LICENSEE shall so report.
5.4 On or before the ninetieth (90th) day following the
close of LICENSEE's fiscal year, LICENSEE shall provide M.I.T. with LICENSEE's
certified financial statements for the preceding fiscal year including, at a
minimum, a Balance Sheet and an Operating Statement.
5.5 The royalty payments set forth in this Agreement and
amounts due under Article 6 shall, if overdue, bear interest until payment at a
per annum rate two percent (2%) above the prime rate in effect at the Chase
Manhattan Bank (N.A.) on the due date. The payment of such interest shall not
foreclose M.I.T. from exercising any other rights it may have as a consequence
of the lateness of any payment.
ARTICLE 6 - PATENT PROSECUTION
6.1 Except as provided in Section 6.4, M.I.T. shall apply
for, seek prompt issuance of, and maintain during the term of this Agreement
the PATENT RIGHTS in the United States and in the foreign countries listed in
Appendix B hereto. Appendix B may be amended by
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
verbal agreement of both parties, such agreement to be confirmed in writing
within ten (10) days. The prosecution, filing and maintenance of all PATENT
RIGHTS patents and applications shall be the primary responsibility of M.I.T.;
provided, however, that patent counsel selected by M.I.T. is reasonably
acceptable to LICENSEE. M.I.T. (and by instruction its patent counsel) shall
consult with LICENSEE and its patent counsel as to the preparation and filing,
prosecution and maintenance of PATENT RIGHTS, and shall furnish to LICENSEE and
its patent counsel copies of documents relevant to such preparation, filing,
prosecution or maintenance sufficiently prior to filing such documents or
making any payment due thereunder to allow for review and comment by LICENSEE
and its patent counsel. If, as a result of any such consultation, LICENSEE
shall elect not to pay the expenses of any patent application or patent
included in PATENT RIGHTS (which election may be limited to a specific country
or countries), LICENSEE shall so notify M.I.T. within thirty (30) days of such
consultation and shall thereby surrender its rights under PATENT RIGHTS in the
country or countries affected, provided, however, that LICENSEE shall remain
obligated to reimburse M.I.T. for any costs incurred with respect to such
patent application or patent prior to said election. M.I.T. agrees that it
shall not abandon the prosecution of any patent applications under PATENT
RIGHTS nor shall it fail to make any payment or fail to take any other action
necessary to obtain or maintain a patent under PATENT RIGHTS unless it has
notified LICENSEE in sufficient time for LICENSEE to assume such prosecution,
make such payment or take such action, and LICENSEE shall thereafter have the
right to prosecute and/or maintain such PATENT RIGHTS at its expense in
M.I.T.'s name, and M.I.T. shall thereafter render to LICENSEE all necessary
assistance in order to facilitate such prosecution and/or maintenance.
6.2 LICENSEE shall reimburse M.I.T. for payment of all
fees and costs relating to the filing, prosecution, and maintenance of the
PATENT RIGHTS incurred by M.I.T. after the Effective Date of this Agreement.
6.3 [****]
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6.4 If, pursuant to Section 8.B.2 of the Research
Agreement, LICENSEE obtains an exclusive license to a new invention which is
added to PATENT RIGHTS, and if such new invention is jointly owned pursuant to
Section 8.F. of the Research Agreement ("JOINT PATENT RIGHTS"), LICENSEE shall
apply for, seek prompt issuance of, and maintain during the term of this
Agreement at its own expense such JOINT PATENT RIGHTS in the United States and
in such other countries as LICENSEE shall have elected. The prosecution, filing
and maintenance of JOINT PATENT RIGHTS shall be the primary responsibility of
LICENSEE; provided, however that patent counsel selected by LICENSEE is
reasonably acceptable to M.I.T. LICENSEE (and by instruction its patent
counsel) shall consult with M.I.T. and its patent counsel as to the preparation
and filing, prosecution and maintenance of JOINT PATENT RIGHTS, and shall
furnish to M.I.T. and its patent counsel copies of documents relevant to such
preparation, filing, prosecution or maintenance sufficiently prior to filing
such documents or making any payment due thereunder to allow for review and
comment by M.I.T. and its patent counsel. If, at any time, LICENSEE shall elect
not to pay the expenses of any patent application or patent included in JOINT
PATENT RIGHTS (which election may be limited to a specific country or
countries), LICENSEE shall so notify M.I.T. within thirty (30) days of such
consultation and shall thereby surrender its rights under JOINT PATENT RIGHTS
in the country or countries affected, provided, however, that LICENSEE shall
remain obligated for any COSTS incurred with respect to such patent application
or patent prior to said election. LICENSEE agrees that it shall not abandon the
prosecution of any patent applications under JOINT PATENT RIGHTS nor shall it
fail to make any payment or fail to take any other action necessary to obtain
or maintain, in a patent under JOINT PATENT RIGHTS unless it has notified
M.I.T. in sufficient time for M.I.T. to assume such prosecution, make such
payment or take such action, and M.I.T. shall thereafter have the right to
prosecute and/or maintain such JOINT PATENT RIGHTS at its expense in LICENSEE's
name, and LICENSEE shall thereafter render to M.I.T. all necessary assistance
in order to facilitate such prosecution and/or maintenance.
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
ARTICLE 7 - INFRINGEMENT
7.1 LICENSEE shall inform M.I.T. promptly in writing of
any alleged infringement of the PATENT RIGHTS by a third party of which
LICENSEE becomes aware and of any available evidence thereof.
7.2 During the term of this Agreement, M.I.T. shall have
the right, but shall not be obligated to prosecute at its own expense all
infringements of the PATENT RIGHTS and, in furtherance of such right, LICENSEE
hereby agrees that M.I.T. may include LICENSEE as a party plaintiff in any such
suit, without expense to LICENSEE. M.I.T.'s choice of counsel in any such suit
shall be subject to LICENSEE's approval, providing that such approval shall not
be unreasonably withheld. The total cost of any such infringement action
commenced or defended [****]
7.3 If within six (6) months after having been notified
of any alleged infringement, M.I.T. shall have been unsuccessful in persuading
the alleged infringer to desist and shall not have brought and shall not be
diligently prosecuting an infringement action, or if M.I.T. shall notify
LICENSEE at any time prior thereto of its intention not to bring suit against
any alleged infringer in the TERRITORY for the FIELD OF USE, then, and in those
events only, LICENSEE shall have the right, but shall not be obligated, to
prosecute at its own expense any infringement of the PATENT RIGHTS in the
TERRITORY for the FIELD OF USE, and LICENSEE may, for such purposes, use the
name of M.I.T. as party plaintiff; provided, however, that such right to bring
such an infringement action shall remain in effect only for so long as the
license granted herein remains exclusive. No settlement, consent judgment or
other voluntary final disposition of the suit may be entered into without the
consent of M.I.T., which consent shall not unreasonably be withheld. LICENSEE
shall indemnify M.I.T. against any order for costs that may be made against
M.I.T. in such proceedings.
7.4 In the event that LICENSEE shall undertake the
enforcement and/or defense of the PATENT RIGHTS by litigation, [****] Any
recovery of damages by LICENSEE
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
for each such suit shall be applied first in satisfaction of any unreimbursed
expenses and legal fees of LICENSEE relating to such suit, [****]
7.5 For any patent of the PATENT RIGHTS jointly owned by
M.I.T. and LICENSEE, LICENSEE shall have the first right to enforce and/or
defend the patent. Other provisions of such enforcement or defense by LICENSEE
shall be in accordance with Paragraphs 7.3 and 7.4 above. If LICENSEE chooses
not to enforce or defend such patent, M.I.T. shall then have the right to do
so, in accordance with the provisions of Paragraph 7.2 above.
7.6 In the event that a declaratory judgment action
alleging invalidity or noninfringement of any of the PATENT RIGHTS shall be
brought against LICENSEE, M.I.T., at its option, shall have the right, within
thirty (30) days after commencement of such action, to intervene and take over
the sole defense of the action at its own expense.
7.7 In any infringement suit as either party may
institute to enforce the PATENT RIGHTS pursuant to this Agreement, the other
party hereto shall, at the request and expense of the party initiating such
suit, cooperate in all respects and, to the extent possible, have its employees
testify when requested and make available relevant records, papers,
information, samples, specimens, and the like.
ARTICLE 8 - PRODUCT LIABILITY
8.1 LICENSEE shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold M.I.T. and PRC, their
trustees, officers, employees and affiliates, harmless against all claims and
expenses, including legal expenses and reasonable attorneys' fees, rising out
of the death of or injury to any person or persons or out of any damage to
property and against any other claim, proceeding, demand, expense and liability
of any kind whatsoever resulting from the production, manufacture, sale, use,
lease, consumption or advertisement of the LICENSED PRODUCT(s) and/or LICENSED
PROCESS(es) or arising from any obligation of LICENSEE hereunder.
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<PAGE> 15
8.2 Commencing not later than commencement of human
trials of any LICENSED PRODUCT, LICENSEE shall obtain and carry in full force
and effect liability insurance which shall protect LICENSEE and M.I.T. in
regard to events covered by Paragraph 8.1 above, providing that such insurance
is available at commercially acceptable rates.
8.3 M.I.T. warrants that it owns above or jointly with
PRC the PATENT RIGHTS and that it has the right to grant the rights and
licenses granted in this agreement. M.I.T.'s total liability under this
warranty shall be limited to the amounts paid by LICENSEE to M.I.T. under this
License Agreement.
8.4 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, M.I.T. MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF PATENT
RIGHTS CLAIMS, ISSUED OR PENDING. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED
AS A REPRESENTATION MADE OR WARRANTY GIVEN BY M.I.T. THAT THE PRACTICE BY
LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS
OF ANY THIRD PARTY.
ARTICLE 9 - EXPORT CONTROLS
It is understood that M.I.T. is subject to United States laws
and regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the Export Administration Act of 1979), and that its
obligations hereunder are contingent on compliance with applicable United
States export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United
States Government and/or written assurances by LICENSEE that LICENSEE shall not
export data or commodities to certain foreign countries without prior approval
of such agency. M.I.T. neither represents that a license shall not be required
nor that, if required, it shall be issued.
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ARTICLE 10 - NON-USE OF NAMES
LICENSEE shall not use the names or trademarks of the
Massachusetts Institute of Technology nor of Pennsylvania Research Corporation
nor of Pennsylvania State University, nor any adaptation thereof, nor the names
of any of their employees, in any advertising, promotional or sales literature
without prior written consent obtained from M.I.T., PRC or said employee, in
each case, except that LICENSEE may state that it is licensed by M.I.T. under
one or more of the patents and/or applications comprising the PATENT RIGHTS.
ARTICLE 11 - ASSIGNMENT
This Agreement is not assignable except by LICENSEE in
conjunction with substantially all of the assets of LICENSEE which relate to
the business of vaccines and immunotherapeutics. Any other attempt to do so is
void.
ARTICLE 12- DISPUTE RESOLUTION
12.1 For any and all claims, disputes or controversies
arising under, out of, or in connection with this Agreement, including any
dispute relating to patent validity or infringement, which the parties shall be
unable to resolve within sixty (60) days, the party raising such dispute shall
promptly advise the other party of such claim, dispute or controversy in a
writing which describes in reasonable detail the nature of such dispute. By not
later than five (5) business days after the recipient has received such notice
of dispute, each party shall have selected for itself a representative who
shall have the authority to bind such party, and shall additionally have
advised the other party in writing of the name and title of such
representative. By not later than ten (10) business days after the date of such
notice of dispute, such representatives shall schedule a date for a mediation
hearing with the Cambridge Dispute Settlement Center or Endispute Inc. in
Cambridge, Massachusetts. If the representatives of the parties have not been
able to resolve the dispute within fifteen (15) business days after such
mediation hearing, the parties shall have the right to pursue any other
remedies legally available to resolve such dispute in either the Courts of the
Commonwealth of Massachusetts or in the United States District Court for the
District of Massachusetts, to whose jurisdiction for such purposes M.I.T. and
LICENSEE each hereby irrevocably consents and submits.
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
12.2 Notwithstanding the foregoing, nothing in this
Article shall be construed to waive any rights or timely performance of any
obligations existing under this Agreement.
ARTICLE 13 - TERMINATION
13.1 If LICENSEE shall cease to carry on its business,
this Agreement shall terminate upon notice by M.I.T.
13.2 Should LICENSEE fail to make any payment whatsoever
due and payable to M.I.T. hereunder, M.I.T. shall have the right to terminate
this Agreement effective on thirty (30) days' notice, unless LICENSEE shall
make all such payments to M.I.T. within said thirty (30) day period. Upon the
expiration of the thirty (30) day period, if LICENSEE shall not have made all
such payments to M.I.T., the rights, privileges and license granted hereunder
shall automatically terminate.
13.3 Upon any material breach or default of this Agreement
by LICENSEE, other than those occurrences set out in Paragraphs 13.1 and 13.2
hereinabove, which shall always take precedence in that order over any material
breach or default referred to in this Paragraph 13.3, M.I.T. shall have the
right to terminate this Agreement and the rights, privileges and license
granted hereunder effective on ninety (90) days' notice to LICENSEE. Such
termination shall become automatically effective unless LICENSEE shall have
cured any such material breach or default prior to the expiration of the ninety
(90) day period. The above notwithstanding, if LICENSEE is in breach of Article
3, but otherwise in compliance with the terms of this Agreement [****]
13.4 [****]
13.5 LICENSEE shall have the right to terminate this
Agreement at any time on six (6) months' notice to M.I.T., and upon payment of
all amounts due M.I.T. through the effective date of the termination.
13.6 Upon termination of this Agreement for any reason,
nothing herein shall be construed to release either party from any obligation
that matured prior to the effective date of
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<PAGE> 18
such termination. LICENSEE and any sublicensee thereof may, however, after the
effective date of such termination, sell all LICENSED PRODUCTS, and complete
LICENSED PRODUCTS in the process of manufacture at the time of such termination
and sell the same, provided that LICENSEE shall pay to M.I.T. the Running
Royalties thereon as required by Article 4 of this Agreement and shall submit
the reports required by Article 5 hereof on the sales of LICENSED PRODUCTS.
13.7 Upon termination of this Agreement for any reason,
any sublicensee not then in default shall have the right to seek a license from
M.I.T., M.I.T. agrees to negotiate such licenses in good faith under
reasonable terms and conditions.
ARTICLE 14- PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
Any payment, notice or other communication pursuant to this
Agreement shall be sufficiently made or given on the date of mailing if sent to
such party by certified first class mail, postage prepaid, addressed to it at
its address below or as it shall designate by written notice given to the other
party:
In the case of M.I.T.:
Director
Technology Licensing Office
Massachusetts Institute of Technology
Room E32-300
Cambridge, Massachusetts 02139
In the case of LICENSEE:
President
Virus Research Institute
840 Memorial Drive
Cambridge, MA 02139
ARTICLE 15 - MISCELLANEOUS PROVISIONS
15.1 This Agreement shall be construed, governed,
interpreted and applied in accordance with the laws of the Commonwealth of
Massachusetts, U.S.A., except that questions
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<PAGE> 19
affecting the construction and effect of any patent shall be determined by the
law of the country in which the patent was granted.
15.2 The parties hereto acknowledge that this Agreement
sets forth the entire Agreement and understanding of the parties hereto as to
the subject matter hereof, and shall not be subject to any change or
modification except by the execution of a written instrument subscribed to by
the parties hereto.
15.3 The provisions of this Agreement are severable, in
the event that any provisions of this Agreement shall be determined to be
invalid or unenforceable under any controlling body of the law, such invalidity
or unenforceability shall not in any way affect the validity or enforceability
of the remaining provisions hereof.
15.4 LICENSEE agrees to mark the LICENSED PRODUCTS sold in
the United States with all applicable United States patent numbers. All
LICENSED PRODUCTS shipped to or sold in other countries shall be marked in such
a manner as to conform with the patent laws and practice of the country of
manufacture or sale.
15.5 The failure of either party to assert a right
hereunder or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition by the other party.
IN WITNESS WHEREOF the parties have duly executed this
Agreement the day and year set forth below.
MASSACHUSETTS INSTITUTE OF VIRUS RESEARCH INSTITUTE
TECHNOLOGY
By /s/ John T. Preston By /s/ John W. Littlechild
-------------------------------------- -------------------------
Title Director, Technology License Office Title President
----------------------------------- ----------------------
Date 12/5/91 Date 12/6/91
----------------------------------- ----------------------
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
APPENDIX A
[****]
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
APPENDIX B
[****]
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<PAGE> 22
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
APPENDIX C
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
OFFICE OF SPONSORED PROGRAMS
RESEARCH AGREEMENT between the MASSACHUSETTS INSTITUTE OF
TECHNOLOGY, hereinafter referred to as "the Institute" and the VIRUS
RESEARCH INSTITUTE, hereinafter referred to as "the Sponsor".
WHEREAS, the research program contemplated by this Agreement is of mutual
interest and benefit to the Institute and to the Sponsor, and will
further the instructional and research objectives of the Institute in
a manner consistent with its status as a non-profit, tax-exempt,
educational institution.
NOW, THEREFORE, the parties hereto agree as follows:
1. STATEMENT OF WORK. [****]
2. PRINCIPAL INVESTIGATOR. [****]
3. PERIOD OF PERFORMANCE. [****]
4. REIMBURSEMENT OF COSTS. [****]
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
5. PAYMENT. Payments shall be made to the Institute by the
Sponsor in advance on the following basis:
[****]
6. TERMINATION. Performance under this Agreement may be
terminated by the Sponsor upon six months written notice;
performance may be terminated by the Institute if
circumstances beyond its control preclude continuation of the
research. Upon termination, the Institute will be reimbursed
as specified in Article 4 for all costs and non-cancelable
commitments incurred in the performance of the research, such
reimbursement not to exceed the total estimated project cost
specified in Article 4.
7. PUBLICATIONS. The Institute will be free to publish the
results of research under this Agreement; provided that a copy
of each publication will be provided to the Sponsor at least
thirty (30) days in advance of publication and, if the
publication would disclose a patentable invention, the
Institute will delay publication for an additional sixty (60)
days to enable the Institute or Sponsor to file a patent
application in accordance with Section 8.
8. INTELLECTUAL PROPERTY.
A. Title to any invention conceived or first reduced to
practice in the performance of the research program
shall remain with the Institute which shall have the
sole right to determine the disposition of any
inventions or other rights resulting therefrom,
including the right to determine whether or not a
patent application will be filed, and shall so notify
the Sponsor.
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
B. In the event that a patent application on such an
invention is filed by the Institute, the Sponsor
(subject to third party rights, if any, in such
invention) shall be entitled to elect one of the
following alternatives by notice in writing to the
Institute within six (6) months after notification to
the Sponsor that a patent application has been filed:
1. [****]
2. [****]
3. [****]
C. In the event that the Sponsor has not elected any of
the foregoing alternatives within six (6) months
after notification that a patent application has been
filed, the Sponsor shall be deemed to have elected
alterative 3. above.
D. [****]
E. In the event that the Institute declines to file a
patent application, the Sponsor may file in the
United States and/or elsewhere, in the name of the
Institute, and shall be entitled to elect between the
above alternatives no later than six (6) months after
such filing date.
F. Inventions made jointly by employees of the Institute
and employees of the Sponsor shall be owned jointly
by the Institute and the Sponsor and, in the absence
of any further agreement, the Institute and the
Sponsor shall
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each have the independent right to use and/or license
the jointly owned invention(s). The Institute shall
grant to Sponsor the same option and license rights
to the Institute's rights in jointly owned
invention(s) as are granted to the Sponsor in
Paragraph 8B above.
G. The Sponsor shall retain all invention disclosures
submitted by the Institute in confidence and use its
best efforts to prevent their disclosure to third
parties. The Sponsor shall be relieved of this
obligation only when this information becomes
publicly available through no fault of the Sponsor.
H. Title to and the right to determine the disposition
of any copyrights or copyrightable material first
produced or composed in the performance of this
research shall remain with the Institute. The
Institute shall grant to the Sponsor an irrevocable,
royalty-free, non-transferable, non-exclusive right
and license to use, reproduce, display, distribute,
translate and perform, all such copyrightable
materials other than computer software and its
documentation. The Institute shall grant to the
Sponsor an irrevocable, royalty-free, non-
transferable, non-exclusive right and license to use,
reproduce, display, translate and perform computer
software and its documentation specified to be
developed and delivered under the Statement of Work
for Sponsor's internal (non-commercial) research
purposes. Sponsor may elect to negotiate a
non-exclusive (or exclusive subject to third party
rights, if any) royalty-bearing license to use,
reproduce, display, distribute, translate and perform
such computer software and its documentation for
commercial purposes (in a designated field of use,
where appropriate). Computer software for which a
patent application is filed shall be subject to
paragraph B. above.
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<PAGE> 26
I. In the event that the Institute elects to establish
property rights other than patents to any tangible
research property (TRP), e.g., biological materials,
developed during the course of the research, the
Institute and the Sponsor will determine disposition
of rights to such property by separate agreement. The
Institute will, at a minimum, reserve the right to
use and distribute TRP for non-commercial research
purposes.
J. All licenses elected by Sponsor pursuant to this
clause become effective as of the date the parties
sign a subsequent license agreement, and shall
survive termination or expiration of this Agreement.
9. USE OF NAMES. Neither party will use the name of the other in
any advertising or other form of publicity without the written
permission of the other, in the case of the Institute, that of
the Director of the News Office.
10. NOTICES. Any notices required to be given or which shall be
given under this Agreement shall be in writing delivered by
first class air mail or telex addressed to the parties as
follows:
MASSACHUSETTS INSTITUTE SPONSOR
OF TECHNOLOGY
Mr. George H. Dummer, Director Virus Research
Office of Sponsored Programs, E19-702 Institute, Inc.
Massachusetts Institute of Technology 840 Memorial Drive
77 Massachusetts Avenue Cambridge, MA 02139
Cambridge, MA 02139
In the event notices, statements and payments required under
this Agreement are sent by certified or registered mail by one
party to the party entitled thereto at its
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above address, they shall be deemed to have been given or made
as of the date so mailed.
11. ASSIGNMENT. This agreement shall be binding upon and inure to
the benefit of the parties hereto and the successors to
substantially the entire business and assets of the
respective parties hereto. This Agreement shall not be
assignable by either party without the prior written consent
of the other party; any attempted assignment is void.
12. GOVERNING LAW. The validity and interpretation of this
agreement and the legal relation of the parties to it shall be
governed by the laws of the Commonwealth of Massachusetts.
13. ENTIRE AGREEMENT. Unless otherwise specified, this Agreement
embodies the entire understanding between the Institute and
the Sponsor for this project, and any prior or contemporaneous
representations, either oral or written are hereby superseded.
No amendments or changes to this Agreement including without
limitation, changes in the statement of work, total estimated
cost, and period of performance, shall be effective unless
made in writing and signed by authorized representatives of
the parties.
MASSACHUSETTS INSTITUTE SPONSOR
OF TECHNOLOGY
By /s/ David J. Harrigan By /s/ John W. Littlechild
---------------------------- -------------------------
Associate Director/
Office of Sponsored
Title Programs Title President
------------------------ ---------------------
Date 12/5/91 Date 12/6/91
------------------------ ---------------------
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
FIRST AMENDMENT
This Amendment is to the License Agreement with the Effective
Date of December 6, 1991 between MASSACHUSETTS INSTITUTE OF TECHNOLOGY and
VIRUS RESEARCH INSTITUTE, INC.
The parties thereto now further agree as follows:
1. [****]
2. LICENSEE shall pay to M.I.T., in addition to the fees and royalties
due under Article IV of the License Agreement, the following fees:
a) [****]
b) [****]
3. [****]
4. The effective date of this Amendment shall be the last date of the
signatures below. Agreed to for:
MASSACHUSETTS INSTITUTE OF VIRUS RESEARCH INSTITUTE, INC.
TECHNOLOGY
By /s/ John T. Preston By /s/ Bryan E. Roberts
--------------------------------- ----------------------------------
Title Director, Technology Licensing Title V.P., Research & Development
------------------------------ -------------------------------
Date 9-17-92 Date 9-17-92
------------------------------- --------------------------------
-26-
<PAGE> 1
EXHIBIT 10.18
Portions of this Exhibit have been omitted pursuant to a request for
Confidential Treatment. The omitted portions, marked by [****], have been
separately filed with the Commission.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is made and entered into as of
December 13, 1994 (the "Effective Date") between VIRUS RESEARCH INSTITUTE,
INC., as its Delaware corporation having its principal place of business at 61
Moulton Street, Cambridge, Mass 02138 (hereinafter referred to as "VRI"), and
PASTEUR MERIEUX SERUMS ET VACCINS, a French corporation having its registered
head office at 58 Avenue Leclerc, Lyon, France (hereinafter referred to as
"PMC").
RECITALS
A. VRI has certain proprietary rights relating to the use of
polyphosphazene as an immunoadjuvant for vaccines against human diseases.
B. PMC desires to obtain a license to such rights and to
research, develop, manufacture, market, sell and distribute certain vaccines
which incorporate polyphosphazene, all under the terms and conditions set forth
below.
NOW THEREFORE, for and in consideration of the covenants, conditions
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" shall mean, with respect to any Person, (i) any
other Person of which securities or other ownership interests representing 50%
or more of the voting interests (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction) are,
at the time such determination is being made, owned, controlled or held
directly or indirectly, by such Person, or (ii) any other Person which, at the
time such determination is being made, is Controlling, Controlled by or under
common Control with, such Person.
For the purpose of this section 1.1, "Control," whether used as a noun
or verb, refers to the possession directly or indirectly, of the power to
direct, or cause the direction of, the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and "Person" means any natural person, corporation, firm, business trust, joint
venture, association, organization, company, partnership or other business
entity, or any
<PAGE> 2
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
government, or any agency or political subdivision thereof. The Joint Venture
companies known as Pasteur Merieux MSD Snc and MCM Vaccine Co. are Affiliates
of PMC.
1.2 "Co-Exclusive Vaccine" shall mean a parenterally administered
vaccine (other than a DNA vaccine) against one or more of the following
diseases: Respiratory Syncytial Virus ("RSV"), Para Influenza, Cytomegalovirus
("CMV"), Pneumococcal Pneumonia ("Pneumo") (including S. pneumoniae,
Branhamalla and non-typable Haemophilus Influenza), Rabies, each alone or in
combination with each other, and specifically excluding a combination of (a)
one or more of the vaccines specifically enumerated as a Co-Exclusive Vaccine
or Exclusive Vaccine with (b) a vaccine which is not specifically enumerated as
an Exclusive Vaccine or Co-Exclusive Vaccine.
1.3 "Exclusive Vaccine" shall mean a parenterally administered
vaccine(s) (other than a DNA vaccine) against one or more of Lyme Disease,
Meningococcus and Influenza, each alone or in combination with each other or in
combination with a Co-Exclusive Vaccine and shall also include the combination
[****] excluding a combination of (a) one or more of the vaccines specifically
enumerated as a Co-Exclusive Vaccine or Exclusive Vaccine with (b) a vaccine
which is not specifically enumerated as an Exclusive Vaccine or Co-Exclusive
Vaccine.
1.4 "Field" shall mean the prevention of a disease in humans.
1.5 "Licensed Know-How" shall mean any biological materials, and
any research and development information, inventions, know-how, pre-clinical,
clinical and other technical data, in each case that are owned by VRI, or
possessed by VRI with the right to provide the same to others, from and after
the Effective Date and which is necessary or useful for the improving, making,
using or selling of Licensed Products as provided in this Agreement.
1.7 "Licensed Product(s)" shall mean, individually and
collectively, the Exclusive Vaccines and the Co-Exclusive Vaccines provided
that polyphosphazene is used as an immunoadjuvant in the product containing
such vaccine.
1.8 "Net Sales" shall mean the gross invoice price of Licensed
Products sold or distributed by PMC or its Affiliates or any of their
sublicensees, less: (i) normal and customary rebates, trade discounts, and
credits for returns and allowances, all to the extent actually allowed, (ii) to
the extent separately reported on the invoice, sales or other excise taxes or
duties imposed upon and paid by PMC, its Affiliates or sublicensees with
respect to such sales, and (iii) transportation charges and insurance for
transportation to the extent separately invoiced or separately reported on the
invoice and paid by the seller.
2
<PAGE> 3
In the event that Licensed Product is sold in other than an arms
length transaction, then Net Sales shall be the gross invoice price which would
be received in an arms length transaction, taking account of any deductions for
items referred to in clauses (i), (ii) and (iii) of the preceding paragraph.
In the event that consideration in addition to or in lieu of money is
received for Licensed Product such consideration shall be added to Net Sales.
Notwithstanding the provisions of this Section, Net Sales shall not
include sales to an Affiliate for resale by such Affiliate.
1.9 "Option Agreement" shall mean the Option Agreement of even
date herewith entered into between the parties hereto.
1.10 "Patent Rights" shall mean the following patents and patent
applications, and all subject matter claimed therein:
(a) All patents and applications listed in Exhibit A; any
continuations, continuations-in-part, divisions and substitutions thereof, or
of which such an application or patent is a successor; patents which may issue
upon any of the foregoing; and all renewals, reissues and extensions thereof;
and
(b) Any foreign patents and/or applications that are
counterparts of a patent or application described in paragraph (a) above,
including any patent or application that claims subject matter claimed in, or
that takes priority from, a patent or application described in paragraph (a)
above.
(c) Any patent or application owned by VRI during the
term of this Agreement which claims polyphosphazene and/or the use thereof in a
parenteral vaccine.
(d) Any patent or patent application as to which PMC
exercises its option under the Option Agreement.
1.11 "PMC Immunoadjuvant Technology" shall mean any and all
materials, information, data, improvements, patents and patent applications
directed to polyphosphazene and/or its use as an immunoadjuvant including, but
not limited to, data related to polymer safety (other than Drug Master Files or
clinical data, and excluding that which is unique to the formulation of
polyphosphazene with a specific PMC antigen) which are owned by PMC or in the
possession of PMC with the right to provide same to others during the term of
the Agreement.
1.12 "Significant Competition" with respect to each Licensed
Product in each country for each calendar year shall mean that a third party
sells a vaccine which competes with a Licensed Product as a given indication,
whether in single antigen or multivalent form and such
3
<PAGE> 4
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
third party vaccine has a commercially recognized advantage in safety,
immunogenicity and/or therapeutic value over the competing Licensed Product and
that such third party vaccine [****] of vaccines for the indication concerned.
The sale of a Co-Exclusive Vaccine by a licensee of VRI shall not be a third
party vaccine for the purpose of this definition.
1.13 "Territory" shall mean (i) all countries included in the
continents of North and South America, including Central America and the
islands of the Carribean, Europe, and Africa, including the dependencies and
territories of such countries; (ii) Thailand, and (iii) all countries
previously part of the U.S.S.R. [****]
1.14 "Valid Claim" shall mean a claim of an issued and unexpired
patent or pending patent application included within the Patent Rights, which
has not been held unenforceable, unpatentable or invalid by a court or other
governmental agency of competent jurisdiction from which no appeal can be or is
taken, and which is not admitted to be invalid or unenforceable through
reissue, disclaimer or otherwise.
ARTICLE 2
GRANT OF RIGHTS
2.1 License to PMC.
(a) Subject to the terms and conditions of this
Agreement, VRI hereby grants to PMC (i) a license under the Patent Rights and
Licensed Know-How to make, have made, and use the Licensed Products which are
Exclusive Vaccines outside of the Territory but only for sale in the Field in
the Territory and to make, have made, use, sell and distribute the Licensed
Products which are Exclusive Vaccines in the Field in the Territory, which
license under this Section 2.1(a)(i) shall be exclusive with respect to sale of
Exclusive Vaccines in the Field in the Territory and in all other respects the
license granted under this Section 2.1(a)(i) is non-exclusive, and (ii) a
license under the Patent Rights and Licensed Know-How to make, have made, and
use the Licensed Products which are Co-Exclusive Vaccines outside of the
Territory but only for sale in the Field in the Territory and to make, have
made, use and sell a Licensed Product which is a Co-Exclusive Vaccine in the
Field in the Territory which license under this Paragraph 2.1(a) shall be
exclusive to PMC for use, sale and distribution of Co-Exclusive Vaccine in the
Field in each country of the Territory but for one other entity which may, at
VRI's option, be VRI or an entity licensed by VRI, and in all other respects
the license granted under
4
<PAGE> 5
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
this Section 2.1(a)(ii) is non-exclusive. It is expressly understood that only
one entity other than PMC will be or be permitted to be licensed by VRI, to use
or sell any Co-Exclusive Vaccine in the Field in any country of the Territory.
(b) Subject to the terms and conditions of this
Agreement, VRI hereby grants to PMC a non-exclusive license under the Patent
Rights and Licensed Know-How (i) to use, sell and distribute the Licensed
Products set forth in Exhibit B in the countries set forth in Exhibit B, but
only to the extent that all of the antigens contained therein are covered by
patent rights of PMC and/or its Affiliates which give PMC an exclusive position
with respect to those antigens in those countries, and (ii) to make and have
made and use Licensed Products set forth in Exhibit B in any country of the
world but only for use, sale and distribution in the countries set forth in
Exhibit B, and only to the extent that all of the antigens contained therein
are covered by patent rights of PMC and/or its Affiliates, which give PMC an
exclusive position with respect to all of the antigens contained in the
Licensed Product of Exhibit B in those countries of Exhibit B. Exhibit B is
intended to set forth the countries in which PMC holds exclusive rights in
respect of a given antigen and the antigens as to which such exclusive rights
are held in that country. Such Exhibit B shall be amended from time to time to
take account of any additional countries and/or additional Licensed Products
which contain only antigens as to which PMC obtains exclusive rights during the
term of this Agreement but only to the extent that VRI is able to grant such a
license and only to the extent VRI has nor previously granted to a third party
rights which would prevent RI from granting such rights to PMC.
(c) Upon written notice to VRI, PMC shall have the right
to be granted a non- exclusive license to use, sell and distribute each
Co-Exclusive Vaccine and each Exclusive Vaccine, in each country (other than
Japan) ,where PMC and/or its Affiliates have patent rights (as an owner or
exclusive licensee) which cover the antigen of such Exclusive Vaccine or
CoExclusive Vaccine provided that VRI has not granted rights to a third party
in such country which would prevent VRI from granting such license to PMC,
which non-exclusive license extension shall be limited to a Co-Exclusive
Vaccine or Exclusive Vaccine, as the case may be, which contains such antigen.
The non-exclusive license shall include the right to make and have made each
such Co-Exclusive Vaccine and Exclusive Vaccine but only for use and sale in
the countries specified in this paragraph. 2.1(c).
(d) [****]
(e) In order to assure PMC of the exclusive rights
granted in Paragraph 2.1(a)(i), VRI shall not grant to a third party or itself
exercise any rights or licenses under Patent Rights and Licensed Know-How to
use, sell or distribute a parenterally administered vaccine [****] against Lyme
Disease, Meningococcus or Influenza in the Field in the Territory. In
addition, except as permitted in Paragraph 2.1(a)(ii), VRI shall not grant to a
third party or itself
5
<PAGE> 6
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
exercise any rights or licenses under Patent Rights and Licensed Know-How to
use, sell or distribute a parenterally administered vaccine [****] against RSV,
Para Influenza, CMV Pneumo (including S. Pneumoniae, Branhamalla and
non-typable Haemophilus Influenza) and Rabies in the Field in the Territory.
2.2 Licenses to VRI. Subject to the rights granted to and
maintained by PMC and to any existing rights of third-parties, PMC hereby
grants to VRI a worldwide, royalty free, license to use PMC Immunoadjuvant
Technology to make, have made, use and sell vaccine products, including the
right to sublicense such license to Affiliates. Such license of PMC
Immunoadjuvant Technology may also be sublicensed to third parties with the
prior written consent of PMC, which consent shall not be unreasonably withheld.
2.3 Sublicenses. With respect to the rights granted under Section
2.1 (a)(i) PMC shall have the right to grant sublicenses under this Agreement
with the prior approval of VRI as to the sublicensee, which approval shall not
be unreasonably denied. With respect to the rights granted under Section
2.1(a)(ii), PMC shall have the right (without the approval of VRI) to grant a
sublicense to one other party in any country where PMC is not selling or does
not intend to sell Licensed Product. PMC shall advise VRI of the name of such
sublicensee when such sublicensee is selected. The rights granted under Section
2.1(b) and (c) are not sublicensable, except to Affiliates of PMC.
2.4 (a) In case of any sublicense by PMC or VRI of the rights
and licenses granted in this Agreement, the sublicensee shall agree to be bound
by the terms, obligations and conditions identical to those of Articles 6 and
10 and Sections 2.5 and 11.5 of this Agreement (substituting the name of the
Sublicensee for that of the sublicensing party), with the other party being
expressly made a third party beneficiary thereof, and the sublicensing party
shall be responsible for the performance by the appointed sublicensee of such
terms, obligations and conditions.
(b) Each sublicense agreement concluded by PMC will
include a requirement that the sublicensee maintain records and permit
inspection on terms essentially identical to Article 9.4 of this Agreement. At
VRI's request, PMC shall arrange for an independent certified accountant
selected by VRI to inspect the records of its sublicensee(s) for the purpose of
verifying royalties due to VRI and shall cause such accountant to report the
results thereof to VRI.
(c) All sublicenses granted for a Licensed Product or for
the PMC immunoadjuvant Technology in a country shall terminate upon termination
of the licenses granted hereunder with respect to such Licensed Product or to
PMC Immunoadjuvant
6
<PAGE> 7
Technology as the case may be, provided that upon expiration of the full term
of this Agreement pursuant to Paragraph 4.1, all parties shall have fully
paid-up, non-cancelable licenses.
2.5 To the extent Patent Rights are licensed to PMC under this
Agreement by PMC exercising its option under the Option Agreement which Patent
Rights VRI has licensed from another party under an agreement with another
party ("Another Party Agreement(s)"), PMC understands and agrees as follows:
(i) The rights licensed to PMC by VRI are subject to the
terms, limitations, restrictions and obligations of the Another Party
Agreement(s).
(ii) PMC will comply with the terms, obligations,
limitations and restrictions of the Another Party Agreement(s) to the extent
PMC has been permitted to review such terms, obligations, limitations and
restrictions. VRI will give PMC, upon request, a reasonable opportunity to
review the same except to the extent that confidentiality or other obligations
towards Another Party may prevent VRI from doing so. In any event VRI shall act
reasonably in advising PMC of the scope of PMC's obligation pursuant to such
Another Party Agreement. It is expressly understood that PMC may refuse to
accept a license under one or more Another Party Agreements, in which case PMC
will not be bound thereby.
2.6 Disclosure of Technology. Upon the execution of this
Agreement, and periodically thereafter upon request by PMC, VRI shall provide
to PMC copies of all available information in tangible form within the Licensed
Know-How or related to the Patent Rights.
2.7 Subject to the terms and conditions of the Supply Agreement to
be negotiated under this Section 2.7, PMC is hereby granted a non-exclusive
right and license under the Patent Rights and Licensed Know-How to make and
have made polyphosphazene for use by PMC, its Affiliates and its sublicensees
as an immunoadjuvant in the manufacture of Licensed Product in accordance with
and to the extent that PMC retains its license to Licensed Product under this
Agreement.
PMC shall have the right at any time during the term of this
Agreement, but not the obligation, to exercise its right under the herein
granted manufacturing license. In the event that PMC decides to exercise such
rights, it shall so inform VRI in writing, and VRI shall promptly disclose to
PMC all applicable manufacturing technology in the possession of VRI at the
time of such disclosure. Subject to applicable confidentiality obligations, VRI
and PMC shall share and exchange any technology and know-how they shall
generate while establishing manufacturing processes and facilities.
When either PMC or VRI achieves manufacture of polyphosphazene
on a commercial basis, it shall have an obligation to use reasonable efforts in
good faith to assist the other to satisfy its reasonable requirements of
polyphosphazene for use as an immunoadjuvant on reasonable commercial terms,
taking into account the respective investments made and risks incurred by the
parties in connection with such manufacture.
7
<PAGE> 8
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
PMC and VRI shall consult in good faith and in their mutual
interest as to an arrangement for the manufacture and supply of polyphosphazene
for clinical lots as well as in commercial quantities for use as an
immunoadjuvant by PMC and its Affiliates and authorized sublicensees in the
Licensed Products as licensed hereunder and for use by VRI, its Affiliates and
licensees (other than PMC).
VRI shall use commercially reasonable efforts to establish a
process capable of yielding under GMP conditions consistent and validated
supplies of polyphosphazene in accordance with agreed upon specifications,
[****]
Upon successful completion of such step, PMC shall pay to VRI
the milestone payment provided for in Section 3.1(b) hereof.
VRI shall use commercially reasonable efforts to obtain a
manufacturer of polyphosphazene. Thereafter, under the terms and conditions of
a supply agreement to be negotiated in good faith between the parties (the
"Supply Agreement"), VRI shall be responsible for scaling-up the process in an
efficient cost-effective GAP manufacturing facility for production or
polyphosphazene according to agreed-upon specifications at industrial scale,
which Supply Agreement shall provide that if VRI manufactures the
polyphosphazene[****].
[****]
PMC shall render all reasonable assistance to VRI in identifying and
selecting a third-party manufacturer. In the event that VRI retains such
manufacturer, VRI shall then, subject to appropriate confidentiality
provisions, transfer to it all of VRI's technology for manufacture of
polyphosphazene.
ARTICLE 3
MILESTONES AND ROYALTIES
3.1 Milestone Fees. PMC shall pay to VRI the non-refundable and
non-creditable amounts specified below within thirty (30) days following the
accomplishment by PMC (or in the case of Paragraph 3.1(a) by PMC or VRI) its
Affiliates or sublicensees of the corresponding event set forth below, or (ii)
within thirty (30) days following receipt by PMC of written notice of
accomplishment by VRI or a VRI's Affiliate of such other corresponding event
set forth below:
(a) The sum of two and one half million dollars, upon the
earlier of (i) successful completion of toxicology work carried out by or on
behalf of PMC or by VRI which
8
<PAGE> 9
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
is suitable for use in the preparation of an IND in the United States (or the
equivalent thereof in the European Union) for a Licensed Product(s) or (ii)
initiation of a Phase I Clinical Trial by or on behalf of PMC anywhere in the
world for a Licensed Product.
(b) the sum of one million dollars upon establishment by
VRI of a process capable of yielding under GMP, conditions consistent and
validated supplies of polyphosphazene in accordance with agreed upon
specifications [****]
(c) Influenza milestone payments as follows:
[****]
(d) [****]
(e) [****]
3.2 Royalties. [****]
(a) [****]
(b) [****]
(c) Earned royalties [****]
The Royalty obligations set forth above will be calculated for each
calendar year by (a) first applying sales in countries for which there has been
[****] up to the total sales of such products and (b) secondly applying sales
in countries for which there has been [****] for which there was [****] and
going up to the level of total sales of products for which there was [****]. An
example of such calculation is as follows:
[****]
(d) In the case of the earned royalties set forth in
paragraphs (a) and (b) above, the royalties would be adjusted in each country
for each calendar year for each Licensed Product in the event PMC was required
to pay royalties to a third party for use of a polyphosphazene immunoadjuvant
in such Licensed Product in such a country for such year utilizing the
following method, but in no event shall [****]
(1) First determine the relationship between Net
Sales in the applicable country for the year and the total worldwide Net Sales
in that same category of sales for the year for the Licensed Product, i.e.,
divide Net Sales in a country for the applicable
9
<PAGE> 10
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
Licensed Product, where, for example, [****] by worldwide Net Sales in all
countries for such Licensed Product [****]
(2) Apply this percentage to total royalties paid
in all such countries for the Licensed Product for the year to determine the
VRI royalties in a country against which a credit for third party royalties
paid in such country may be taken.
(3) Subtract the amount of third party royalties
paid in the country in question [****]
(e) Royalties shall be calculated and paid on a
country-by-country and product-by-product basis [****] provided, however, that
if at any time after the expiration [****], the making, using or selling of the
product is covered by Patent Rights, the royalties shall be paid until the
expiration of the last to expire of any such patent(s).
(f) [****]
3.3 Single Royalty: Non-Royalty Sales. It is understood that in
no event shall more than one royalty be payable under Sections 3.2 with respect
to a particular unit of Licensed Product. No royalty shall be payable under
this Article 3 with respect to sales of Licensed Products among PMC, its
Affiliates and/or sublicensees, but royalty shall be due upon the subsequent
sale of the Licensed Product to an entity who is not an Affiliate or
sublicensee provided, however, that if there is no or is to be no subsequent
sale of the Licensed Product to an entity who is not an Affiliate or a
sublicensee, then the royalty shall be due and shall be based upon the higher
of (i) the gross invoice price to such Affiliate or sublicensee or (ii) the
average gross invoice price which PMC charges to its customers (other than
Affiliates and sublicensees) for the Licensed Product for the relevant
reporting period of Section 9.1 in the relevant country.
No royalty shall be payable for (i) Licensed Product used in clinical
trials, or (ii) Licensed Product used by PMC or its sublicensee for research,
or (iii) customary quantities of Licensed Product distributed by PMC or its
sublicensee as free samples.
3.4 Combination Products. In the event Licensed Products contain
vaccines licensed hereunder in combination, the royalty rate applicable to said
combination products shall be the [****]
10
<PAGE> 11
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
ARTICLE 4
TERM AND TERMINATION
4.1 Term. This Agreement shall become effective as of the
Effective Date and, unless earlier terminated pursuant to the other provisions
of this Article 4, shall continue in full force and effect as long as PMC is
obligated to pay royalties under this Agreement. PMC's license under Section
2.1 with respect to the Licensed Know-How shall survive the expiration, but not
an earlier termination, of this Agreement.
4.2 Termination for Breach. In the event of a material breach of
this Agreement the nonbreaching party in addition to any other remedy which it
may have shall be entitled to terminate this Agreement following written notice
of such breach to the breaching party. If such breach is not cured within
sixty (60) days after written notice is given by the nonbreaching party to the
breaching party specifying the breach, the non-breaching party may terminate
the Agreement forthwith upon written notice to, the breaching party after
expiration of such sixty (60) day period.
4.3 Termination by PMC. (a) Any provision herein notwithstanding,
PMC may terminate this Agreement at any time by giving VRI at least one hundred
and eighty (180) days prior written notice.
(b) PMC may terminate its license with respect to any
Licensed Product by one-hundred and eighty (180) days prior written notice to
VRI, and thereafter such Licensed Product(s) shall no longer be licensed under
this agreement.
(c) In the event of a termination under Article 4.3 (a)
all rights granted herein to PMC shall forthwith revert to VRI and PMC shall
provide VRI [****] developed during the term of this Agreement with respect
thereto which may be used in accordance with [****]
4.4 Survival.
4.4.1 Termination of this Agreement for any reason shall not release
either party hereto from any liability which at the time of such termination
has already accrued to the other party.
4.4.2 In the event this Agreement is terminated for any reason, PMC
and its Affiliates and sublicensees shall have the right to sell to otherwise
dispose of the stock of any Licensed Product then on hand, all subject to the
payment to VRI of fees and royalties pursuant to Article 3 hereof.
11
<PAGE> 12
4.4.3 Articles 6, 10 and 11, and Sections 2.5, 4.43, 4.5, 5.5, 9.3,
and 9.4, shall survive the expiration and any termination of this Agreement.
Except as otherwise provided in Section 4.1 and Section 4.4.3, all rights and
obligations of the parties under this Agreement shall terminate upon the
expiration or termination of this Agreement.
4.5 In the event that PMC's right, and licenses under this
Agreement are terminated, PMC agrees not to make, use or sell Licensed Products
except as permitted by Article 4.4.2.
4.6 Either party may terminate this Agreement on notice if the
other party makes a general assignment for the benefit of creditors, is the
subject of proceedings in voluntary or involuntary bankruptcy or has a receiver
or trustee appointed for substantially all of its property; provided that in
the case of an involuntary bankruptcy proceeding such right to terminate shall
only become effective if the other party consents thereto or such proceeding is
not dismissed within ninety (90) days after the filing thereof. If, in
connection with bankruptcy proceedings involving a party, an election is made
by or on behalf of such party to reject the obligations of this Agreement and
the other party elects to retain its rights to intellectual property hereunder
pursuant to Section 365 n.1 of the Bankruptcy Code (USA), such other party
shall be entitled to enforce any rights exclusively granted to it in respect of
intellectual property hereunder by commencement of any action it deems
necessary to that effect against third-party infringers and may do so in the
name and stead of the bankrupt party.
ARTICLE 5
PATENTS AND INFRINGEMENTS
5.1 Prosecution by VRI. VRI shall have the right, at PMC's
expense, to control the filing for, prosecution and maintenance of the Patent
Rights in the Territory. In the event that VRI grants any license in a country
of the Territory with respect to any Patent Right, then thereafter PMC's
obligation to pay patent costs for Patent Rights in such country shall be an
amount equal to the total cost therefor multiplied by a fraction having as a
numerator one and as a denominator the total number of licenses granted by VRI
in respect of such Patent Rights in such country. VRI shall keep PMC
reasonably informed as to the status of the Patent Rights in the Territory, and
shall provide PMC with copies of all proposed filings and correspondence of a
substantive nature with respect to patents or applications within the Patent
Rights to be made with or sent to the United Sates Patent and Trademark Office
or its counterpart in any country of the Territory (each, a "Patent
Authority"). VRI shall also provide to PMC copies of all correspondence that it
receives from a Patent Authority with respect to the Patent Rights and shall
consider any comments of PMC with respect thereto.
5.2 Infringement Claims. If the production, sale or use of a
Licensed Product result in any claim for infringement of a patent or other
proprietary right of a third party against PMC, its Affiliates or sublicensees
PMC shall promptly notify VRI thereof in writing. As between the
12
<PAGE> 13
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
parties to this Agreement, PMC shall have the right at its own expense to
defend and control the defense of any such claim against PMC, by counsel of
PMC's own choice.
5.3 Enforcement of Patent Rights. (a) In the event that any
Patent Rights are infringed by a third party with respect to an Exclusive
Vaccine or Co-Exclusive Vaccine in the Field in the Territory, with the consent
and approval of VRI (which shall not be unreasonably denied and shall be deemed
to have been granted if VRI shall be in voluntary or involuntary bankruptcy
proceedings, other than a proceeding such as Chapter II where the debtor
continues to operate the business), PMC and/or its Affiliates or sublicensees
shall have the right (except as provided below), but not the obligation, to
institute, and prosecute any action or proceeding under the Patent Rights with
respect to such infringement, by counsel of its choice, including any
declaratory judgment action arising from such infringement. Any amounts
recovered from third parties with respect to the Patent Rights in such action
shall be applied first to reimburse the expenses of the action; then to the
extent the award is [****] PMC shall not have the right to settle, compromise
or take any action in such litigation which diminish, limit or inhibit the
scope, validity or enforceability of the Patent Rights without the express
written permission of VRI. PMC shall keep VRI advised of the progress of such
proceedings.
5.4 In the event that a third party is infringing the Patent
Rights with respect to an Exclusive Vaccine or Co-Exclusive Vaccine in the
Territory in the Field and PMC does not elect to institute an action, VRI shall
have the right, but not the obligation, to commence an infringement suit under
the Patent Rights against such infringer and retain any recovery; provided that
it so notifies PMC. If VRI commences a suit in accordance with this Section
5.4, PMC shall have the right to participate in such suit and [****] the
out-of-pocket expenses thereof. If PMC elects to so participate, it shall
share in any amounts recovered in respect of such suit [****]VRI shall have the
right to control such action with counsel of its choice.
5.5 VRI Participation. In VRI's sole discretion, VRI shall be
entitled to participate at its expense through counsel of its choosing in and
control any legal action by or against PMC affecting the validity or
enforceability of the patents on which Parent Rights are based, and PMC may
elect to participate in any such action to the extent necessary to defend its
own interests.
5.6 Each party agrees to cooperate with each other with respect to
any litigation under Sections 5.2, 5.3 or 5.4.
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ARTICLE 6
CONFIDENTIALITY
6.1 Nondisclosure. Except as otherwise provided in this
Agreement, a party receiving (the "Receiving Party") any business or technical
information ("Proprietary Information") that is disclosed to it by the other
party the ("Disclosing Party") shall for a period beginning on the Effective
Date and ending ten (10) years after the termination of this Agreement hold in
confidence and not disclose to any third party the "Proprietary Information".
In addition, the Receiving Party shall not use Proprietary Information that it
receives from the Disclosing Party, except as is reasonably necessary to
exercise the rights granted to the Receiving Party under Article 2 or Article 5
of this Agreement. Notwithstanding the foregoing, with the prior written
permission of the Disclosing Party (which shall not be unreasonably withheld),
the Receiving Party may disclose information concerning the Patent Rights
and/or the Licensed Know-How to actual or prospective sublicensees or to other
third parties with whom the Receiving Party is considering or has entered into
a business relationship, all of whom are similarly bound in writing under a
reasonable confidentiality agreement. Proprietary Information of a party shall
not include:
6.1.1 Information which is or was published or has become generally
available to the public through no fault of the Receiving Party;
6.1.2 Information which the Receiving Party can document is or was
in its possession at the time of disclosure or was independently developed by
the Receiving Party; or
6.1.3 Information which is rightfully acquired by the Receiving
Party from a third party who is not under an obligations of confidentiality to
the disclosing party, and to the best of the Receiving Party's knowledge and
belief is entitled to rightfully make such disclosure, but only to the extent
the Receiving Party complies with any restrictions imposed by the third party.
6.2 Exceptions. The Receiving Party may disclose Proprietary
Information of the other, in connection with the order of a court of law or
administrative or governmental authority provided that the Receiving Parry
exerts reasonable efforts to preserve the confidentiality thereof and the
disclosing party is given an opportunity to protect the confidentiality
thereof, or as is reasonably necessary in connection with the labeling of its
products that are otherwise sold in compliance with this Agreement or as
required for obtaining regulatory approval of Licensed Product, provided that
the Receiving Party protects the confidentiality thereof to the fullest extent
possible.
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<PAGE> 15
6.3 Notwithstanding anything else to the contrary, PMC agrees that
Licensed Know-How, or Proprietary Information received from VRI shall be used
by PMC only in and for Licensed Products and their development for sale in the
Territory in the Field, all in accordance with this Agreement, and can only be
used by PMC for so long as and to the extent that PMC maintains a license under
this Agreement.
6.4 Notwithstanding anything else to the contrary and subject to
Section 4.1, in the event that PMC's rights and licenses under this Agreement
are terminated, PMC agrees (a) not to use Licensed Know-How, or any Proprietary
Information provided to PMC by VRI or any information developed by PMC which is
derived from or is based on Licensed Know- How for the research, development,
making, or using or selling of any product or process, including, but not
limited to Licensed Products and (b) not to do any of the foregoing while this
Agreement is in force for any product except as licensed under this Agreement.
6.5 Notwithstanding anything else to the contrary, VRI agrees that
Licensed Know- How (including but not limited to PMC Immunoadjuvant Technology)
licensed to it by PMC hereunder may be used only in a manner consistent with
the provisions of this Agreement. VRl's licenses herein shall survive the
expiration of the term hereof but not an earlier termination of this Agreement
except as provided in Section 4.3(c).
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1.1 VRI and PMC each represents and warrant to the other that each
has the full right and authority to enter into this Agreement and grant the
rights and licenses granted herein:
7.1.2 VRI represents and warrants to PMC that it has not previously
granted and, prior to termination of this Agreement, will not grant any rights
in the Patent Rights or the Licensed Know-How that are inconsistent with the
rights and licenses granted to PMC herein;
7.1.3 To the best of VRl's knowledge, there is no pending or
threatened claim or litigation to which VRI is a party contesting the validity
or right to use any of the Patent Rights, and VRI has not received any notice
of infringement with respect to Patent Rights.
7.2 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
SECTION 7.1 ABOVE, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY
WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NO
INFRINGEMENT, OR VALIDITY OF ANY PATENT RIGHTS ISSUED OR PENDING.
15
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The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
7.3 Effect of Representations and Warranties. Subject to Section
7.4, it is understood that if the representations and warranties under this
Article 7 are not true and accurate and PMC incurs liabilities, costs or other
expenses as a result of such falsity, VRI shall indemnify and hold PMC harmless
from and against any such liabilities, costs or expenses incurred, provided
that VRI receives prompt notice of any claim against PMC resulting from or
related to such falsity and the sole right to control the defense or settlement
thereof.
7.4 Limitation of Liability. Notwithstanding anything else to the
contrary, VRl's liability for any breach of this Agreement (including but not
limited to any liability which results from any breach of any representation or
warranty) is limited to the payments received or to be received from PMC under
this Agreement. This Limitation on Liability shall not be applicable to
intentional misconduct on the part of VRI or where PMC, as a result of such
breach, is liable to a Third Party in excess of such Limitation on Liability.
ARTICLE 8
DUE DILIGENCE
8.1 General. PMC shall use commercially reasonable efforts to
research, develop, register, market and sell and to continue to market and sell
each Licensed Product in each country of the Territory. Upon a failure by PMC
to meet its obligations under this Section 8.1 with respect to any Licensed
Product in any country (directly or through a sublicensee), VRI shall, among
other remedies available to it, have the right to terminate the rights and
licenses granted hereunder with respect to such Licensed Product in such
country.
8.2 PMC shall promptly notify VRI, in writing, if at any time PMC
does not intend to continue to research, develop and/or obtain regulatory
approval for and/or market and sell any Licensed Product in any country of the
Territory.
8.3 In the event that PMC provides VRI with notice pursuant to
Section 8.2 with respect to any Licensed Product or with respect to any
country(ies) the rights herein granted by VRI to PMC to such Licensed Product
in such country(ies), upon written notice from VRI to PMC shall revert to VRI.
8.4 In the event that PMC does not meet any of the milestones set
forth in Exhibit C (as the same may be extended as indicated herein) for any of
the Licensed Products set forth in Exhibit C, VRI shall have the right [****]
PMC shall have the right to [****] and the Parties shall agree on a reasonable
period for such extension. Exhibit C shall be appropriately revised to reflect
such extension. In addition, PMC shall have the right to extend each of the
milestones of Exhibit C, if not achieved, as set forth therein by [****] The
parties agree to set similar
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<PAGE> 17
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
milestones for [****] after [****] for one of the Licensed Products included in
Exhibit C. Notwithstanding the preceding sentence, such milestone [****]
8.5 PMC shall provide written reports to VRI on June 30th and
December 31st of each year concerning the efforts being made, in accordance
with Section 8.1 with respect to the Licensed Product. PMC shall provide VRI
with any additional information reasonably requested by VRI in this respect.
Such reports shall be considered to be Proprietary Information of PMC.
ARTICLE 9
ACCOUNTING AND RECORDS
9.1 Reports. PMC agrees to make quarterly written reports to VRI
within sixty (60) days after the end of each calendar quarter in which
royalties are due under this Agreement, stating in each such report the number,
description, and aggregate Net Sales of Licensed Products sold during the
calendar-quarter and upon which a fee or royalty is payable under Article 3
above. The report shall also include the calculation of Net Sales all on a
country by country and Licensed Product by Licensed Product basis. The report
shall be due with respect to sales of Licensed Product sold by PMC sixty (60)
days after the end of the calendar quarter and with respect to sales of
Licensed Product by sublicensees, ninety (90) days after the end of a calendar
quarter. If no such sales have been made, by PMC, its Affiliates and
sublicensees the report shall so state.
9.2 Payment. Concurrently with the making of each such report of
Section 9.1, PMC shall pay to VRI the royalties at the rate specified in
Article 3 above. All payments by PMC to VRI hereunder shall be made in U.S.
Dollars. If any currency conversion shall be required in connection with the
calculation of royalties hereunder, such conversion shall be made by using the
rate of exchange published in the Wall Street Journal for the last business day
of the applicable calendar quarter.
9.3 Withholding Taxes. Any withholding or other tax that PMC or
any of its Affiliates are required by statute to withhold and pay on behalf of
VRI with respect to the royalties payable to VRI under this Agreement shall be
deducted from said royalties and paid contemporaneously with the remittance to
VRI; provided, however, that in regard to any tax so deducted PMC shall furnish
VRI with proper evidence of the taxes paid on its behalf. VRI will furnish PMC
with appropriate documents to secure application of the favorable rate of
withholding tax under applicable tax treaties.
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<PAGE> 18
9.4 Records; Inspection.
9.4.1 PMC shall keep complete, true and accurate books of
account and records for the purpose of determining the amounts payable to VRI
under this Agreement. Such books and records shall be kept at PMC's principal
place of business for at least three (3) years following the end of the
calendar quarter to which they pertain, and will be open for inspection during
such three (3) year period by a representative of VRI for the purpose of
verifying PMC's royalty statements. Such inspections may be made no more than
once each calendar year, during normal business hours and upon thirty (30)/days
prior notice. Any such information shall be considered to be Proprietary
Information of PMC.
9.4.2 Inspections conducted under this Section 9.4 shall be
at the expense of VRI, unless an underpayment exceeding five percent (5%) of
the amount paid for the period covered by the inspection is established in the
course of any such inspection, whereupon all costs relating thereto will be
paid by PMC, as well as any unpaid royalties within the thirty (30) days after
requested by VRI.
ARTICLE 10
INDEMNIFICATION AND INSURANCE
10.1 PMC shall defend, indemnify and hold harmless VRI, Affiliates
of VRI and its licensors, and its respective directors, officers, shareholders,
agents, consultants and employees (collectively, the Indemnitees) from and
against any and all liability, loss, damages and expenses (including reasonable
attorneys' fees) as the result of claims, demands, costs or judgments which may
be made or instituted against any of the Indemnitees arising out of the
manufacture, design, possession, distribution, use, testing, sale or other
disposition by or through PMC and/or Affiliates of PMC and/or licensees of
either PMC or Affiliates of PMC of any Licensed Product and/or any product or
process in connection with or arising out of the Patent Rights or Licensed
Know-How and/or any material provided by PMC or Affiliates of PMC under this
Agreement (in each case, other than any claims, demands, costs or judgments
arising out of, based upon or resulting from infringement of the intellectual
property rights of a third party based upon the use of polyphosphazene as an
immunoadjuvant. PMC's obligation to defend, indemnify and hold harmless shall
include any and all such claims, demands, costs or judgments, including but not
limited to money damages arising from alleged personal injury (including death)
to any person or alleged property damage. PMC shall have the right to control
the defense of any action which is to be indemnified in whole by PMC hereunder,
including the right to select counsel (which shall be reasonably acceptable to
VRI) to defend the Indemnitees and to settle any claim as to which the
Indemnitees are fully indemnified by PMC. Notwithstanding the foregoing, PMC
shall have no obligation to indemnify or hold any Indemnitee harmless with
respect to any claim, demand, cost or judgment that results or is alleged to
result from the willful misconduct or negligence of an Indemnitee nor to the
extent that VRI has the obligation to indemnify under a
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Supply Agreement entered into between the parties pursuant to Par. 2.7. If PMC
does not provide counsel to defend the Indemnitees, VRI shall have the right to
select counsel and PM shall pay the reasonable costs and expenses of said
counsel. The provisions of this paragraph shall survive and remain in full
force and effect after any termination, expiration or cancellation of this
Agreement and PMC's obligation hereunder shall apply whether or not such claims
are rightfully brought.
ARTICLE 11
MISCELLANEOUS
11.1 Publicity. VRI and PMC shall cooperate in the
preparation of a mutually agreeable press release and other publicity
disclosing the existence of this Agreement and their business relationship.
Except for information disclosed in such a mutually agreed press release or
publicity, neither PMC nor VRI shall disclose the existence or any terms of
this Agreement without the prior written consent of the other party, except for
such limited disclosure as may be reasonably necessary to either party's
bankers, investors, attorneys or other professional advisors, or in connection
with a merger or acquisition, or as may be required by law in the offering of
securities or in securities regulatory filings or otherwise.
11.2 Waiver. It is agreed that no waiver by either party hereto of
any breach or default of any of the covenants or agreements herein set forth
shall be deemed a Waiver as to any subsequent and/or similar breach or default.
11.3 Independent Contractors. The relationship of the parties
hereto is that of independent contractors. Neither party hereto is an agent,
partner or joint venturer of the other for any purpose.
11.4 Compliance with Laws. In exercising its rights under this
license, PMC shall fully comply with the requirements of any and all applicable
laws, regulations, rules and orders of any governmental body having
jurisdiction on over the exercise of rights under this license.
11.5 Notices. Any notice required or permitted to be given to the
parties hereto shall be deemed to have been properly given if delivered in
person or when received if mailed by first class certified mail or sent by
facsimile to the other party at the appropriate address as set forth below or
to such other addresses as may be designated in writing by the parties from
time to time during the term of this Agreement.
VRI: VIRUS RESEARCH INSTITUTE. INC.:
61 Moulton Street
Cambridge, Mass. 02138
Attention: Chief Executive Officer
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<PAGE> 20
PMC: PASTEUR MERIEUX SERUMS ET VACCINS:
58 Avenue Leclerc
Lyon, France
Attention: V.P. Product Development with copy to V.P.
Secretary & General Counsel
11.6 Complete Agreement. It is understood and agreed between VRI
and PMC that this Agreement and the Option Agreement constitutes the entire
agreement with respect to the subject matter of this Agreement, both written
and oral, between the parties, and that all prior agreements respecting the
subject matter hereof, either written or oral, expressed or implied, shall be
abrogated, cancelled, and are null and void and of no effect. No amendment or
change hereof or addition hereto shall be effective or binding on either of the
parties hereto unless reduced to writing and executed by the respective duly
authorized representatives of each of the parties hereto.
11.7 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision and the parties shall exert best efforts to amend
this Agreement to include a provision which is valid, legal and enforceable and
which carries out the original intent of the parties. In the event that such a
provision cannot be included in the Agreement and the absence thereof
materially changes a party's obligations or rights under this Agreement, such
party shall have the right to terminate this Agreement.
11.8 Counterparts and Headings. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and both together
shall be deemed to be one and the same agreement. All headings and any cover
page or table of contents are inserted for convenience of reference only and
shall not affect its meaning or interpretation.
11.9 Governing Law. All matters affecting the interpretation,
validity and performance under this Agreement shall be governed by the internal
laws of the Commonwealth of Massachusetts without regard for its conflict of
laws principles.
11.10 Force Majeure. If and to the extent that either party hereto
is prevented, by circumstances not now reasonably foreseeable and not within
its reasonable ability to control, from performing any of its obligations under
this Agreement (other than payment obligations) and promptly so notifies the
other party giving full particulars of the circumstances in question, then the
party affected shall be relieved of liability to the other for failure to
perform such obligations, but shall nevertheless use its best efforts to resume
full performance thereof without avoidable delay, and pending such resumption
shall consult with the other party and shall permit and shall use its best
efforts to facilitate any efforts the other party may make to effect the
performance of such obligations by other means. If such failure to perform
continues for a period of more than one (1) year, the other party may terminate
this Agreement by written notice to the non-performing party with respect to
the rights and licenses with respect to those Licensed
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Products and with respect to those countries affected by such failure. The
failure to achieve milestones under Article 8 and/or the failure to obtain
regulatory approval for a Licensed Product shall not be considered to be
circumstances within this Section 11.10.
ARTICLE 12
ASSIGNMENT; SUCCESSORS
12.1 This Agreement shall not be assignable by either of the
parties without the prior written consent of the other party (which consent
shall not be unreasonably withheld), except that either party may assign this
Agreement to an Affiliate or to a successor in interest or transferee of all or
substantially all of the portion of the business to which this Agreement
relates.
12.2 Subject to the limitations on assignment herein, this
Agreement shall be binding upon and inure to the benefit of said successors in
interest and assigns of VRI and PMC. In order for such assignment to be
effective any such successor or assignee of a party's interest shall expressly
assume in writing the performance of all the terms and conditions of this
Agreement to be performed by said party and such Assignment shall not relieve
the Assignor of any of its obligations under this Agreement.
IN WITNESS WHEREOF, both VRI and PMC have executed this Agreement, in
duplicate originals, by their respective officers hereunto duly authorized, the
day and year first above written.
VIRUS RESEARCH INSTITUTE, INC. PASTEUR MERIEUX SERUMS ET
VACCINS
By: /s/ William A. Packer By: /s/ Jean-Jacques Bertrand
------------------------------ -----------------------------------
Print Name: William A. Packer Print Name: Jean-Jacques Bertrand
Vice Chairman, President & Chief
Title: President Title: Executive Officer
--------------------------- --------------------------------
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The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
EXHIBIT A
PATENT RIGHTS
1. United States
[****]
2. PCT
[****]
22
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The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
EXHIBIT B
PMC PROPRIETARY RIGHTS
[****]
23
<PAGE> 1
EXHIBIT 10. 19
Portions of this Exhibit have been omitted pursuant to a request for
Confidential Treatment. The omitted portions, marked by [****], have been
separately filed with the Commission.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is made and entered into
as of August 2, 1995 (the "Effective Date") between VIRUS RESEARCH INSTITUTE,
INC., a Delaware corporation having its principal place of business at 61
Moulton Street, Cambridge, Mass 02138 (hereinafter referred to as "VRI"), and
PASTEUR MERIEUX SERUMS ET VACCINS, a French corporation having its registered
head office at 58 Avenue Leclerc, Lyon, France (hereinafter referred to as
"PMC").
RECITALS
A. VRI has certain proprietary rights relating to the use of
polyphosphazene for the mucosal delivery of vaccines against human diseases.
B. PMC desires to obtain a license to such rights and to
research, develop, manufacture, market, sell and distribute certain vaccines
which incorporate polyphosphazene, all under the terms and conditions set forth
below.
NOW THEREFORE, for and in consideration of the covenants,
conditions, and undertakings hereinafter sat forth, it is agreed by and between
the parties as follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" shall mean, with respect to any Person,
(i) any other Person of which securities or other ownership interests
representing 50% or more of the voting interests (or such lesser percentage
which is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction) are, at the time such determination is being made,
owned, controlled or held directly or indirectly, by such Person, or (ii) any
other Person which, at the time such determination is being made, is
Controlling, Controlled by or under common Control with, such Person.
For the purpose of this section 1.1, "Control," whether used
as a noun or verb, refers to the possession directly or indirectly, of the
power to direct, or cause the direction of, the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, and "Person" means any natural person, corporation, firm, business
trust, joint venture, association, organization, company, partnership or other
business entity, or
<PAGE> 2
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
any government, or any agency or political subdivision thereof. The Joint
Venture companies known as Pasteur Merieux MSD Snc and MCM Vaccine Co. are
Affiliates of PMC.
1.2 "Co-Exclusive Vaccine" shall mean a mucosally
administered vaccine (other than a DNA vaccine) against one or more of the
following diseases: Respiratory Syncytial Virus ("RSV"), Para Influenza,
Cytomegalovirus ("CMV"), Pneumococcal Pneumonia ("Pneumo") (including S.
pneumoniae, Branhamalla, non-typable Haemophilus Influenza and Otitis Media),
Rabies, each alone or in combination with each other, and specifically
excluding a combination of (a) one or more of the vaccines specifically
enumerated as a Co-Exclusive Vaccine or Exclusive Vaccine with (b) a vaccine
which is not specifically enumerated as an Exclusive Vaccine or Co-Exclusive
Vaccine.
1.3 "Exclusive Vaccine" shall mean a mucosally
administered vaccine(s) (other than a DNA vaccine) against one or more of Lyme
Disease, Meningococcus and Influenza, each alone or in combination with each
other or in combination with a Co-Exclusive Vaccine and shall also include
[****] specifically excluding a combination of (a) one or more of the vaccines
specifically enumerated as a Co-Exclusive Vaccine or Exclusive Vaccine with (b)
a vaccine which is not specifically enumerated as an Exclusive Vaccine or
Co-Exclusive Vaccine.
1.4 "Field" shall mean the prevention of a disease in
humans.
1.5 "Licensed Know-How" shall mean any biological
materials, and any research and development information, inventions, know-how,
pre-clinical, clinical and other technical data, in each case that are owned by
VRI, or possessed by VRI with the right to provide the same to others, from and
after the Effective Date and which is necessary or useful for the improving,
making, using or selling of Licensed Products as provided in this Agreement.
1.7 "Licensed Product(s)" shall mean, individually and
collectively, the Exclusive Vaccines and the Co-Exclusive Vaccines provided
that polyphosphazene is used for the mucosal administration of the product
containing such vaccine.
1.8 "Net Sales" shall mean the gross invoice price of
Licensed Products sold or distributed by PMC or its Affiliates or any of their
sublicensees, less: (i) normal and customary rebates, trade discounts, and
credits for returns and allowances, all to the extent actually allowed, (ii) to
the extent separately reported on the invoice, sales or other excise taxes or
duties imposed upon and paid by PMC, its Affiliates or sublicensees with
respect to such sales, and (iii) transportation charges and insurance for
transportation to the extent separately invoiced or separately reported on the
invoice and paid by the seller.
-2-
<PAGE> 3
In the event that Licensed Product is sold in other than an
arms length transaction, then Net Sales shall be the gross invoice price which
would be received in an arms length transaction, taking account of any
deductions for items referred to in clauses (i), (ii) and (iii) of the
preceding paragraph.
In the event that consideration in addition to or in lieu of
money is received for Licensed Product such consideration shall be added to Net
Sales.
Notwithstanding the provisions of this Section, Net Sales
shall not include sales to an Affiliate for resale by such Affiliate.
1.9 "Patent Rights" shall mean the following patents and
patent applications, and all subject matter claimed therein:
(a) All patents and applications listed in
Exhibit A; any continuations, continuations-in-part, divisions and
substitutions thereof, or of which such an application or patent is a
successor; patents which may issue upon any of the foregoing; and all renewals,
reissues and extensions thereof; and
(b) Any foreign patents and/or applications that
are counterparts of a patent or application described in paragraph (a) above,
including any patent or application that claims subject matter claimed in, or
that takes priority from, a patent or application described in paragraph (a)
above; and
(c) Any patent or application owned by VRI during
the term of this Agreement which claims polyphosphazene and/or the use thereof
in as part of a vehicle for the mucosal administration of vaccine.
1.10 "PMC Mucosal Delivery Technology" shall mean any and
all materials, information, data, improvements, patents and patent applications
directed to polyphosphazene and/or its use as part of a mucosal delivery system
including, but not limited to, data related to polymer safety (other than Drug
Master Files or clinical data, and excluding that which is unique to the
formulation of polyphosphazene with a specific PMC antigen) which are owned by
PMC or in the possession of PMC with the right to provide same to others during
the term of the Agreement.
1.11 "Significant Competition" with respect to each
Licensed Product in each country for each calendar year shall mean that a third
party sells a mucosally delivered vaccine which competes with a Licensed
Product as to a given indication, whether in single antigen or multivalent form
and such third party vaccine has a commercially recognized advantage in safety,
immunogenicity and/or therapeutic value over the competing Licensed
-3-
<PAGE> 4
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
Product and that such third party vaccine has [****] vaccines for the
indication concerned. The sale of a Co-Exclusive Vaccine by a licensee of VRI
or the sale of a polyphosphazene adjuvanted parenteral vaccine shall not be a
third party vaccine for the purpose of this definition.
1.12 "Territory" shall mean (i) all countries included in
the continents of North and South America, including Central America and the
islands of the Caribbean, Europe, and Africa, including the dependencies and
territories of such countries; (ii) Thailand, and (iii) all countries
previously part of the U.S.S.R. [****]
1.13 "Valid Claim" shall mean a claim of an issued and
unexpired patent or pending patent application included within the Patent
Rights, which has not been held unenforceable, unpatentable or invalid by a
court or other governmental agency of competent jurisdiction from which no
appeal can be or is taken, and which has not been admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise.
ARTICLE 2
GRANT OF RIGHTS
2.1 License to PMC. (a) Subject to the terms and
conditions of this Agreement, VRI hereby grants to PMC (i) a license under the
Patent Rights and Licensed Know-How to make, have made, and use the Licensed
Products which are Exclusive Vaccines outside of the Territory but only for
sale in the Field in the Territory and to make, have made, use, sell and
distribute the Licensed Products which are Exclusive Vaccines in the Field in
the Territory, which license under this Section 2.l(a)(i) shall be exclusive
with respect to sale of Exclusive Vaccines in the Field in the Territory and in
all other respects the license granted under this Section 2.1(a)(i) is
non-exclusive, and (ii) a license under the Patent Rights and Licensed Know-How
to make, have made, and use the Licensed Products which are Co-Exclusive
Vaccines outside of the Territory but only for sale in the Field in the
Territory and to make, have made, use and sell a Licensed Product which is a
Co-Exclusive Vaccine in the Field in the Territory which license under this
Paragraph 2.1(a) shall be exclusive to PMC for use, sale and distribution of
Co-Exclusive Vaccine in the Field in each country of the Territory but for one
other entity which may, at VRI's option, be VRI or an entity licensed by VRI,
and in all other respects the license granted under this Section 2.l(a)(ii) is
non-exclusive. It is expressly understood that only one entity other than PMC
will be or be permitted to be licensed by VRI, to use or sell any Co-Exclusive
Vaccine in the Field in any country of the Territory.
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The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
(b) Subject to the terms and conditions of this
Agreement, VRI hereby grants to PMC a non-exclusive license under the Patent
Rights and Licensed Know-How (i) to use, sell and distribute the Licensed
Products set forth in Exhibit B in the countries set forth in Exhibit B, but
only to the extent that all of the antigens contained therein are covered by
patent rights of PMC and/or its Affiliates which give PMC an exclusive position
with respect to those antigens in those countries, and (ii) to make and have
made and use Licensed Products set forth in Exhibit B in any country of the
world but only for use, sale and distribution in the countries set forth in
Exhibit B, and only to the extent that all of the antigens contained therein
are covered by patent rights of PMC and/or its Affiliates, which give PMC an
exclusive position with respect to all of the antigens contained in the
Licensed Product of Exhibit B in those countries of Exhibit B. Exhibit B is
intended to set forth the countries in which PMC holds exclusive rights in
respect of a given antigen and the antigens as to which such exclusive rights
are held in that country. Such Exhibit B shall be amended from time to time to
take account of any additional countries and/or additional Licensed Products
which contain only antigens as to which PMC obtains exclusive rights during the
term of this Agreement but only to the extent that VRI is able to grant such a
license and only to the extent VRI has not previously granted to a third party
rights which would prevent VRI from granting such rights to PMC.
(c) Upon written notice to VRI, PMC shall have
the right to be granted a non-exclusive license to use, sell and distribute
each Co-Exclusive Vaccine and each Exclusive Vaccine, in each country (other
than Japan) where PMC and/or its Affiliates have patent rights (as an owner or
exclusive licensee) which cover the antigen of such Exclusive Vaccine or
Co-Exclusive Vaccine provided that VRI has not granted rights to a third party
in such country which would prevent VRI from granting such license to PMC,
which non-exclusive license extension shall be limited to a Co-Exclusive
Vaccine or Exclusive Vaccine, as the case may be, which contains such antigen.
The non-exclusive license shall include the right to make and have made each
such Co-Exclusive Vaccine and Exclusive Vaccine but only for use and sale in
the countries specified in this Paragraph 2.1(c).
(d) [****]
(e) In order to assure PMC of the exclusive
rights granted in Section 2.1(a)(i), VRI shall not grant to a third party or
itself exercise any rights or licenses under Patent Rights and Licensed
Know-How to use, sell or distribute a mucosally administered vaccine [****]
against Lyme Disease, Meningococcus or Influenza in the Field in the Territory.
In addition, except as permitted in Section 2.1 (a (ii), VRI shall not grant to
a third party or itself exercise any rights or licenses under Patent Rights and
Licensed Know-How to use, sell or distribute a mucosally administered vaccine
[****] against RSV, Para Influenza, CMV Pneumo (including S. Pneumoniae,
Branhamalla, non-typable Haemophilus Influenza and Otitis Media) and Rabies in
the Field in the Territory.
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<PAGE> 6
2.2 Licenses to VRI. Subject to the rights granted to
and maintained by PMC and to any existing rights of third-parties, PMC hereby
grants to VRI a worldwide, royalty free, license to use PMC Mucosal Delivery
Technology to make, have made, use and sell vaccine products, including the
right to sublicense such license to Affiliates. Such license of PMC Mucosal
Delivery Technology may also be sublicensed to third parties with the prior
written consent of PMC, which consent shall not be unreasonably withheld.
2.3 Sublicenses. With respect to the rights granted
under Section 2.1(a)(i) PMC shall have the right to grant sublicenses under
this Agreement with the prior approval of VRI as to the sublicensee, which
approval shall not be unreasonably denied. With respect to the rights granted
under Section 2.1(a)(ii), PMC shall have the right (without the approval of
VRI) to grant a sublicense to one other party in any country where PMC is not
selling or does not intend to sell Licensed Product. PMC shall advise VRI of
the name of such sublicensee when such sublicensee is selected. The rights
granted under Section 2.1(b) and (c) are not sublicensable, except to
Affiliates of PMC.
2.4 (a) In case of any sublicense by PMC or VRI of
the rights and licenses granted in this Agreement, the sublicensee shall agree
to be bound by the terms, obligations and conditions identical to those of
Articles 7 and 10 and Sections 2.5 and 12.5 of this Agreement (substituting the
name of the Sublicensee for that of the sublicensing party), with the other
party being expressly made a third party beneficiary thereof, and the
sublicensing party shall be responsible for the performance by the appointed
sublicensee of such terms, obligations and conditions.
(b) Each sublicense agreement concluded by PMC
will include a requirement that the sublicensee maintain records and permit
inspection on terms essentially identical to Article 10.4 of this Agreement.
At VRI's request, PMC shall arrange for an independent certified accountant
selected by VRI to inspect the records of its sublicensee(s) for the purpose of
verifying royalties due to VRI and shall cause such accountant to report the
results thereof to VRI.
(c) All sublicenses granted for a Licensed
Product or for the PMC Mucosal Delivery Technology in a country shall terminate
upon termination of the licenses granted hereunder with respect to such
Licensed Product or to PMC Mucosal Delivery Technology as the case may be,
provided that upon expiration of the full term of this Agreement pursuant to
Paragraph 5.1, all parties shall have fully paid-up, non-cancelable licenses.
2.5 To the extent Patent Rights licensed to PMC under
this Agreement have been licensed by VRI from another party under an agreement
with another party ("Another Party Agreement(s)"), PMC understands and agrees
as follows:
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<PAGE> 7
(i) The rights licensed to PMC by VRI are subject
to the terms, limitations, restrictions and obligations of the
Another Party Agreement(s).
(ii) PMC will comply with the terms, obligations,
limitations and restrictions of the Another Party Agreement(s)
to the extent PMC has been permitted to review such terms,
obligations, limitations and restrictions. VRI will give PMC,
upon request, a reasonable opportunity to review the same
except to the extent that confidentiality or other obligations
towards Another Party may prevent VRI from doing so. In any
event VRI shall act reasonably in advising PMC of the scope of
PMC's obligation pursuant to such Another Party Agreement. It
is expressly understood that PMC may refuse to accept a
license under one or more Another Party Agreements, in which
case PMC will not be bound thereby.
2.6 Disclosure of Technology. Upon the execution of this
Agreement, and periodically thereafter upon request by PMC, VRI shall provide
to PMC copies of all available information in tangible form within the Licensed
Know-How or related to the Patent Rights.
2.7 Subject to the terms and conditions of the Supply
Agreement to be negotiated under this Section 2.7, PMC is hereby granted a
non-exclusive right and license under the Patent Rights and Licensed Know-How
to make and have made polyphosphazene for use by PMC, its Affiliates and its
sublicensees as part of a mucosal delivery system in the manufacture of
Licensed Product in accordance with and to the extent that PMC retains its
license to Licensed Product under this Agreement.
PMC shall have the right at any time during the term of this
Agreement, but not the obligation, to exercise its right under the herein
granted manufacturing license. In the event that PMC decides to exercise such
rights, it shall so inform VRI in writing, and VRI shall promptly disclose to
PMC all applicable manufacturing technology in the possession of VRI at the
time of such disclosure. Subject to applicable confidentiality obligations,
VRI and PMC shall share and exchange any technology and know-how they shall
generate while establishing manufacturing processes and facilities.
When either PMC or VRI achieves manufacture of polyphosphazene
on a commercial basis, it shall have an obligation to use reasonable efforts in
good faith to assist the other to satisfy its reasonable requirements of
polyphosphazene for use as part of a vehicle for a mucosal delivery system for
vaccines on reasonable commercial terms, taking into account the respective
investments made and risks incurred by the parties in connection with such
manufacture.
PMC and VRI shall consult in good faith and in their mutual
interest as to an arrangement for the manufacture and supply of polyphosphazene
for clinical lots as well as in
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The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
commercial quantities for use as a part of a mucosal delivery system by PMC and
its Affiliates and authorized sublicensees in the Licensed Products as licensed
hereunder and for use by VRI, its Affiliates and licensees (other than PMC).
VRI shall use commercially reasonable efforts to establish a
process capable of yielding under GMP conditions consistent and validated
supplies of polyphosphazene in accordance with agreed upon specifications,
[****]
VRI shall use commercially reasonable efforts to obtain a
manufacturer of polyphosphazene. Thereafter, under the terms and conditions of
a supply agreement to be negotiated in good faith between the parties (the
"Supply Agreement"), VRI shall be
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
responsible for scaling-up the process in an efficient, cost-effective GMP
manufacturing facility for production of polyphosphazene according to
agreed-upon specifications at industrial scale, which Supply Agreement [****]
PMC shall render all reasonable assistance to VRI in
identifying and selecting a third-party manufacturer. In the event that VRI
retains such manufacturer, VRI shall then, subject to appropriate
confidentiality provisions, transfer to it all of VRI's technology for
manufacture of polyphosphazene.
ARTICLE 3
MILESTONES AND ROYALTIES
3.1 Milestone Fees. PMC shall pay to VRI the
non-refundable and non-creditable amounts specified below within thirty (30)
days following the accomplishment by PMC, its Affiliates or sublicensees of the
corresponding event set forth below, or (ii) within thirty (30) days following
receipt by PMC of written notice of accomplishment by VRI or a VRI's Affiliate
of such other corresponding event set forth below:
(a) [****]
(b) [****]
3.2 Royalties. [****]
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The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
(a) [****]
(b) [****]
(c) [****]
(d) In the case of the earned royalties set forth
in paragraphs (a) and (b) above, the royalties would be adjusted in each
country for each calendar year for each Licensed Product in the event PMC was
required to pay royalties to a third party for use of polyphosphazene as part
of a mucosal delivery system in such Licensed Product in such a country for
such year utilizing the following method, but in no event shall [****]
(1) First determine the relationship between Net Sales in the
applicable country for the year and the total worldwide Net Sales in that same
category of sales for the year for the Licensed Product, i.e., divide Net Sales
in a country for the applicable Licensed Product, where, [****] by worldwide
Net Sales in all countries for such Licensed Product [****].
(2) Apply this percentage to total
royalties paid in all such countries for the Licensed Product for the year to
determine the VRI royalties in a country against which a credit for third party
royalties paid in such country may be taken.
(3) Subtract the amount of third party
royalties paid in the country in question from [****].
(e) Royalties shall be calculated and paid on a
country-by-country and product-by-product basis [****] provided, however, that
if at any time after the expiration [****], the making, using or selling of the
product is covered by Patent Rights, the royalties shall be paid until the
expiration if the last to expire of any such patent(s).
(f) [****]
3.3 Single Royalty: Non-Royalty Sales. It is understood
that in no event shall more than one royalty be payable under Section 3.2 with
respect to a particular unit of Licensed Product. No royalty be payable under
Section 3 with respect to sales of Licensed Products among PMC, its Affiliates
and/or sublicensees, but royalty shall be due upon the subsequent sale of the
Licensed Product to an entity who is not an Affiliate or sublicensee provided,
however, that if there is no or is to be no subsequent sale of the Licensed
Product to an entity who is not an Affiliate or a sublicensee, then the royalty
shall be due and shall be based upon the higher of (i) the gross invoice price
to such Affiliate or sublicensee or (ii) the average gross invoice price with
PMC charges to its customers (other than Affiliates and
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<PAGE> 10
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
sublicensees) for the Licensed Product for the relevant reporting period of
Section 9.1 in the relevant country.
No royalty shall be payable for (i) Licensed Product used in
clinical trials, or (ii) Licensed Product used by PMC or its sublicensee for
research, or (iii) customary quantities of Licensed Product distributed by PMC
or its sublicensee as free samples.
3.4 Combination Products. In the event Licensed Products
contain vaccines licensed hereunder in combination, the royalty rate applicable
to said combination products shall be the rate [****]
ARTICLE 4
RESEARCH PROGRAM
4.1 Object. Pursuant to the mutually agreed upon
research program attached hereto as Exhibit D (the "Research Program"), VRI
agrees to conduct the research described therein and PMC agrees to support and
fund such Research Program in accordance with the terms and conditions set
forth below.
4.2 Oversight of the Research Program
(a) Oversight. The Research Program will be
overseen and monitored by the Research Steering Committee as described herein
(the "Committee").
(b) Membership. [****] Such representatives will
be qualified, by reason of background and experience, to assess the scientific
progress of the Research Program. Each party will have the right to change its
representation on the Committee upon written notice sent to the other.
(c) Chair. [****]
(d) Responsibilities. The Committee will have
authority to:
(i) review and approve the draft
Research Program prepared by VRI and establish
the definitive Research Program;
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<PAGE> 11
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
(ii) make recommendations regarding the
performance of the Research Program and the conduct
of the research pursuant thereto, and monitor
performance thereunder;
(iii) modify the Research Program as it
determines, for each twelve (12) month period during
the term thereof;
(iv) review any and all proposed
publication[s] or communication[s] relating to the
Research Program and the results therefrom, in
accordance with the procedure set forth in this
Article 4;
(v) review any and all proposed filing
of patent application[s] in connection with the
Research Program.
4.3 Meetings. [****] Meetings in person will normally
take place at VRI's premises or such other pace as may be mutually agreed upon.
Meetings may be held by telephone. At such meetings, the Committee will
discuss the Research Program and the status of performance by VRI under the
program, evaluate the results thereof and set priorities therefor. [****] The
Committee will prepare written minutes of each meeting and a written record of
all decisions whether made at a formal meeting or not. Such minutes will
incorporate semi-annual research reports prepared for the parties by VRI. A
quorum for a meeting shall require [****]
4.4 Committee Deadlock. If there are issues on which the
Committee cannot reach agreement because of a Deadlock (as hereinafter
defined)[****]
4.5 The Principal Investigator.
(a) Principal Investigator. [****]
(b) Duties. The Principal Investigator will
direct the Research Program and coordinate the efforts of other researchers
involved in the performance of such Program. The Principal Investigator will
sit with the Committee as provided in Section 4.2 hereof, will perform the
duties set forth hereunder and will be afforded the opportunity to actively
participate in all Committee deliberations. The Principal Investigator will
provide reasonably detailed status reports of the Research Program to the
Committee at six-month intervals, as well as at the earliest practicable time
whenever, in the Principal Investigator's judgment, an invention is created or
reduced to practice. The Principal Investigator will devote such time and
efforts as may be required to fulfill his duties hereunder and to ensure the
successful administration and coordination of the Research Program.
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<PAGE> 12
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
(c) Replacement. The Principal Investigator may
be replaced in the event the then existing Principal Investigator is no longer
able or is unwilling to so serve or fails to perform the duties assigned. In
such circumstances VRI, with the consent of PMC shall appoint a substitute
Principal Investigator. PMC will not unreasonably withhold its consent to a
substitute Principal Investigator proposed by VRI. [****]
4.6 (a) Conduct of Research Program. The Research
Program will be conducted by VRI at VRI's laboratories. VRI will use all
reasonable efforts to complete research in accordance with the said Research
Program [****]. Any research work performed by VRI pursuant hereto will be in
compliance with Good Laboratory Practices as applicable in the United States of
America. [****]
(b) Visitation. For the purpose of facilitating
PMC's understanding of the research activities conducted by VRI hereunder, VRI
will permit duly authorized employees or representatives of PMC to visit its
facilities where the research is conducted, at reasonable times and with
reasonable notice.
4.7 Financial Conditions.
(a) Support Commitment. PMC will provide funding
for and during the term of the Research Program up to a maximum of two million
five hundred thousand United States dollars (2,500,000 US$) (the "Maximum
Commitment"). The Maximum Commitment will be inclusive of all costs incurred
by VRI implementing the Research Program.
(b) Payment Schedule. Support payments will be
made by PMC to VRI in four (4) equal half-year payments of six hundred
twenty-five thousand United States dollars (625,000 US$) in advance with the
first payment to be made within eight (8) days of the Effective Date hereof.
4.8 VRI will provide an annual budget for the research
program and semi-annual financial reports of actual and budgeted expenditure.
[****]
[****] the records on which these reports are based shall be
open, no more than once each year, for inspection by an independent certified
accountant selected by PMC and acceptable to VRI, upon reasonable notice during
normal business hours and at PMC's expense, for the sole purpose of verifying
the accuracy of the reports.
[****]
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<PAGE> 13
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
4.9 No Conflict With Research Program. VRI agrees that
the Research Program funds provided by PMC will be applied to the Research
Program and may not, without PMC prior written approval, be used in support of
any other research at VRI.
4.10 Title to Equipment. VRI will retain title to any
equipment purchased with funds provided by PMC under this Agreement, if such
purchase is mutually agreed upon as part of the Research Program budget.
4.11 Term and termination.
(a) The term of the Research Program will be two
(2) years as from the Effective Date hereof.
(b) In addition to any other remedy which it may
have, PMC will be entitled to terminate the Research Program and cease funding
thereof in the event of a material breach by VRI of any of VRI's obligations
and covenants hereunder following written notice or such breach to VRI. If
such breach is not cured within thirty (30) days after written notice is given
by PMC to VRI specifying the breach, PMC may terminate the Research Program and
cease funding hereunder forthwith upon written notice to VRI after expiration
of such thirty (30) day period, and [****]
(c) In the event that the Research Program is
terminated pursuant to this Section 4.11, VRI's right to receive any unpaid
balance otherwise committed by PMC as support commitment pursuant to Section
4.7 hereof will become forfeited and no further payments with respect to the
Research Program will be due to VRI by PMC except to the extent that such funds
are needed to pay actual and non-cancelable obligations of VRI accrued to that
date.
4.12 Confidentiality. In order to facilitate the
operation of the Research Program, either party may disclose confidential or
proprietary information owned or controlled by it to the other. It is hereby
understood and agreed that such information shall be deemed "Proprietary
Information" and treated as such in accordance with Article 7.
4.13 Results of the Research Program
(a) [****]
(b) [****]
(c) [****]
(d) [****]
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<PAGE> 14
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
(e) [****]
(f) [****]
(g) [****]
(h) [****]
4.14 [****]
ARTICLE 5
TERM AND TERMINATION
5.1 Term. This Agreement shall become effective as of
the Effective Date and, unless earlier terminated pursuant to the other
provisions of this Article 5, shall continue in full force and effect as long
as PMC is obligated to pay royalties under this Agreement. PMC's license under
Section 2.1 with respect to the Licensed Know-How shall survive the expiration,
but not an earlier termination, of this Agreement.
5.2 Termination for Breach. In the event of a material
breach of this Agreement the nonbreaching party in addition to any other remedy
which it may have shall be entitled to terminate this Agreement following
written notice of such breach to the breaching party. If such breach is not
cured within sixty (60) days after written notice is given by the non-breaching
party to the breaching party specifying the breach, the non-breaching party may
terminate the Agreement forthwith upon written notice to the breaching party
after expiration of such sixty (60) day period.
5.3 Termination by PMC. (a) Any provision herein
notwithstanding, after completing PMC's funding obligation under Article 4, PMC
may terminate this Agreement at any time by giving VRI at least one hundred and
eighty (180) days prior written notice.
(b) PMC may terminate its license with respect to
any Licensed Product by one hundred and eighty (180) days prior written notice
to VRI, and thereafter such Licensed Product(s) shall no longer be licensed
under this agreement.
(c) In the event of a termination under Section
5.3 (a) all rights granted herein to PMC shall forthwith revert to VRI [****].
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<PAGE> 15
5.4 Survival.
5.4.1 Termination of this Agreement for any reason
shall not release either party hereto from any liability which at the time of
such termination has already accrued to the other party.
5.4.2 In the event this Agreement is terminated for
any reason, PMC and its Affiliates and sublicensees shall have the right to
sell or otherwise dispose of the stock of any Licensed Product then on hand,
all subject to the payment to VRI of fees and royalties pursuant to Article 3
hereof.
5.4.3 Articles 7, 11 and 12, and Sections 2.5, 5.,
5.5, 8.4, 10.3 and 10.4, shall survive the expiration and any termination of
this Agreement. Except as otherwise provided in Section 5.1 and Section 5.4.3,
all rights and obligations of the parties under this Agreement shall terminate
upon the expiration or termination of this Agreement.
5.5 In the event that PMC's rights and licenses under
this Agreement are terminated, PMC agrees not to make, use or sell Licensed
Products except as permitted by Article 5.4.2.
5.6 Either party may terminate this Agreement on notice
if the other party makes a general assignment for the benefit of creditors, is
the subject of proceedings in voluntary or involuntary bankruptcy or has a
receiver or trustee appointed for substantially all of its property; provided
that in the case of an involuntary bankruptcy proceeding such right to
terminate shall only become effective if the other party consents thereto or
such proceeding is not dismissed within ninety (90) days after the filing
thereof. If, in connection with bankruptcy proceedings involving a party, an
election is made by or on behalf of such party to reject the obligations of
this Agreement and the other party elects to retain its rights to intellectual
property hereunder pursuant to Section 365 n.1 of the Bankruptcy Code (USA),
such other party shall be entitled to enforce any rights exclusively granted to
it in respect of intellectual property hereunder by commencement of any action
it deems necessary to that effect against third-party infringers and may do so
in the name and stead of the bankrupt party.
ARTICLE 6
PATENTS AND INFRINGEMENTS
6.1 Prosecution by VRI. VRI shall have the right, at
PMC's expense, to control the filing for, prosecution and maintenance of the
Patent Rights in the Territory. In the event that VRI grants any license in a
country of the Territory with respect to any Patent Right, then thereafter
PMC's obligation to pay patent costs for Patent Rights in such country shall be
an amount equal to the total cost therefor multiplied by a fraction having as a
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<PAGE> 16
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
numerator one and as a denominator the total number of licenses granted by VRI
in respect of such Patent Rights in such country. VRI hall keep PMC reasonably
informed as to the status of the Patent Rights in the Territory, and shall
provide PMC with copies of all proposed filings and correspondence of a
substantive nature with respect to patents or applications within the Patent
Rights to be made with or sent to the United Sates Patent and Trademark Office
or its counterpart in any country of the Territory (each, a "Patent
Authority"). VRI shall also provide to PMC copies of all correspondence that
it receives from a Patent Authority with respect to the Patent Rights and shall
consider any comments of PMC with respect thereto.
6.2 Infringement Claims. If the production, sale or use
of a Licensed Product results in any claim for infringement of a patent or
other proprietary right of a third party against PMC, its Affiliates or
sublicensees, PMC shall promptly notify VRI thereof in writing. As between the
parties to this Agreement, PMC shall have the right at its own expense to
defend and control the defense of any such claim against PMC, by counsel of
PMC's own choice.
6.3 Enforcement of Patent Rights. (a) In the event that
any Patent Rights are infringed by a third party with respect to an Exclusive
Vaccine or Co-Exclusive Vaccine in the Field in the Territory, with the consent
and approval of VRI (which shall not be unreasonably denied and shall be deemed
to have been granted if VRI shall be in voluntary or involuntary bankruptcy
proceedings, other than a proceeding such as Chapter 11 where the debtor
continues to operate the business), PMC and/or its Affiliates or sublicensees
shall have the right (except as provided below), but not the obligation, to
institute, and prosecute any action or proceeding under the Patent Rights with
respect to such infringement, by counsel of its choice, including any
declaratory judgment action arising from such infringement. Any amounts
recovered from third parties with respect to the Patent Rights in such action
shall be applied first to reimburse the expenses of the action; then to the
extent the award [****]. PMC shall not have the right to settle, compromise or
take any action in such litigation which diminish, limit or inhibit the scope,
validity or enforceability of the Patent Rights without the express written
permission of VRI. PMC shall keep VRI advised of the progress of such
proceedings.
6.4 In the event that a third party is infringing the
Patent Rights with respect to an Exclusive Vaccine or Co-Exclusive Vaccine in
the Territory in the Field and PMC does not elect to institute an action, VRI
shall have the right, but not the obligation, to commence an infringement suit
under the Patent Rights against such infringer and retain any recovery;
provided that it so notifies PMC. If VRI commences a suit in accordance with
this Section 6.4, PMC shall have the [****] expenses thereof. If PMC elects to
so participate,[****]. VRI shall have the right to control such action with
counsel of its choice.
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<PAGE> 17
6.5 VRI Participation. In VRI's sole discretion, VRI
shall be entitled to participate at its expense through counsel of its choosing
in and control any legal action by or against PMC affecting the validity or
enforceability of the patents on which Patent Rights are based, and PMC may
elect to participate in any such action to the extent necessary to defend its
own interests.
6.6 Each party agrees to cooperate with each other with
respect to any litigation under Sections 6.2, 6.3 or 6.4.
ARTICLE 7
CONFIDENTIALITY
7.1 Nondisclosure. Except as otherwise provided in this
Agreement, a party receiving (the "Receiving Party") any business or technical
information ("Proprietary Information") that is disclosed to it by the other
party the ("Disclosing Party") shall for a period beginning on the Effective
Date and ending ten (10) years after the termination of this Agreement hold in
confidence and not disclose to any third party the "Proprietary Information".
In addition, the Receiving Party shall not use Proprietary Information that it
receives from the Disclosing Party, except as is reasonably necessary to
exercise the rights granted to the Receiving Party under Article 2 or Article 6
of this Agreement. Notwithstanding the foregoing, with the prior written
permission of the Disclosing Party (which shall not be unreasonably withheld),
the Receiving Party may disclose information concerning the Patent Rights
and/or the Licensed Know-How to actual or prospective sublicensees or to other
third parties with whom the Receiving Party is considering or has entered into
a business relationship, all of whom are similarly bound in writing under a
reasonable confidentiality agreement. Proprietary Information of a party shall
not include:
7.1.1 Information which is or was published or has
become generally available to the public through no fault of the Receiving
Party;
7.1.2 Information which the Receiving Party can
document is or was in its possession at the time of disclosure or was
independently developed by the Receiving Party; or
7.1.3 Information which is rightfully acquired by
the Receiving Party from a third party who is not under an obligation of
confidentiality to the disclosing party, and to the best of the Receiving
Party's knowledge and belief is entitled to rightfully make such disclosure,
but only to the extent the Receiving Party complies with any restrictions
imposed by the third party.
7.2 Exceptions. The Receiving Party may disclose
Proprietary Information of the other, in connection with the order of a court
of law or administrative or governmental authority provided that the Receiving
Party exerts reasonable efforts to preserve the
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<PAGE> 18
confidentiality thereof and the disclosing party is given an opportunity to
protect the confidentiality thereof, or as is reasonably necessary in
connection with the labeling of its products that are otherwise sold in
compliance with this Agreement or as required for obtaining regulatory approval
of Licensed Product, provided that the Receiving Party protects the
confidentiality thereof to the fullest extent possible.
7.3 Notwithstanding anything else to the contrary, PMC
agrees that Licensed Know-How, or Proprietary Information received from VRI
shall be used by PMC only in and for Licensed Products and their development
for sale in the Territory in the Field, all in accordance with this Agreement,
and can only be used by PMC for so long as and to the extent that PMC maintains
a license under this Agreement.
7.4 Notwithstanding anything else to the contrary and
subject to Section 5.1, in the event that PMC's rights and licenses under this
Agreement are terminated, PMC agrees a) not to use Licensed Know-How, or any
Proprietary Information provided to PMC by VRI or any information developed by
PMC which is derived from or is based on Licensed Know-How for the research,
development, making, or using or selling of any product or process, including,
but not limited to Licensed Products and (b) not to do any of the foregoing
while this Agreement is in force for any product except as licensed under this
Agreement.
7.5 Notwithstanding anything else to the contrary, VRI
agrees that PMC Mucosal Delivery Technology licensed to it by PMC hereunder may
be used only in a manner consistent with the provisions of this Agreement.
VRI's licenses herein shall survive the expiration of the term hereof but not
an earlier termination of this Agreement except as provided in Section 5.3(c).
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1.1 VRI and PMC each represents and warrants to
the other that each has the full right and authority to enter into this
Agreement and grant the rights and licenses granted herein;
8.1.2 VRI represents and warrants to PMC that it
has not previously granted and, prior to termination of this Agreement, will
not grant any rights in the Patent Rights or the Licensed Know-How that are
inconsistent with the rights and licenses granted to PMC herein;
8.1.3 To the best of VRI's knowledge, there is no
pending or threatened claim or litigation to which VRI is a party contesting
the validity or right to use any of the Patent Rights, and VRI has not received
any notice of infringement with respect to Patent Rights.
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<PAGE> 19
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
8.2 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN SECTION 8.1 ABOVE, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NONINFRINGEMENT, OR VALIDITY OF ANY PATENT RIGHTS ISSUED OR PENDING.
8.3 Effect of Representations and Warranties. Subject to
Section 8.4, it is understood that if the representations and warranties under
this Article 8 are not true and accurate and PMC incurs liabilities, costs or
other expenses as a result of such falsity, VRI shall indemnify and hold PMC
harmless from and against any such liabilities, costs or expenses incurred,
provided that VRI receives prompt notice of any claim against PMC resulting
from or related to such falsity and the sole right to control the defense or
settlement thereof.
8.4 Limitation of Liability. Notwithstanding anything
else to the contrary, VRI's liability for any breach of this Agreement
(including but not limited to any liability which results from any breach of
any representation or warranty) is limited to the payments received or to be
received from PMC under this Agreement. This Limitation on Liability shall not
be applicable to intentional misconduct on the part of VRI or where PMC, as a
result of such breach, is liable to a third party in excess of such Limitation
on Liability.
ARTICLE 9
DUE DILIGENCE
9.1 General. PMC shall use commercially reasonable
efforts to research, develop, register, market and sell and to continue to
market and sell each Licensed Product in each country of the Territory; [****].
Upon a failure by PMC to meet its obligations under this Section 9.1 with
respect to any Licensed Product in any country (directly or through a
sublicensee), VRI shall, among other remedies available to it, [****]
9.2 PMC shall promptly notify VRI, in writing, if at any
time PMC does not intend to continue to research, develop and/or obtain
regulatory approval for and/or market and sell any Licensed Product in any
country of the Territory.
9.3 In the event that PMC provides VRI with notice
pursuant to Section 9.2 with respect to any Licensed Product or with respect to
any country(ies) the rights herein
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<PAGE> 20
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
granted by VRI to PMC to such Licensed Product in such country(ies), upon
written notice from VRI to PMC shall revert to VRI.
9.4 In the event that PMC does not meet any of the
milestones set forth in Exhibit C (as the same may be extended as indicated
herein) for any of the Licensed Products set forth in Exhibit C, VRI shall have
the right to [****]. PMC shall have the right to a [****] and the Parties shall
agree on a reasonable period for such extension. Exhibit C shall be
appropriately revised to reflect such extension. In addition, PMC shall have
the right to extend each of the milestones of Exhibit C, if not achieved,
[****]. The parties agree to set similar milestones for [****]
9.5 PMC shall provide written reports to VRI on June 30th
and December 31st of each year concerning the efforts being made in accordance
with Section 9.1 with respect to the Licensed Product. PMC shall provide VRI
with any additional information reasonably requested by VRI in this respect.
Such reports shall be considered to be Proprietary Information of PMC.
ARTICLE 10
ACCOUNTING AND RECORDS
10.1 Reports. PMC agrees to make quarterly written
reports to VRI within sixty (60) days after the end of each calendar quarter in
which royalties are due under this Agreement, stating in each such report the
number, description, and aggregate Net Sales of Licensed Products sold during
the calendar quarter and upon which a fee or royalty is payable under Article 3
above. The report shall also include the calculation of Net Sales all on a
country by country and Licensed Product by Licensed Product basis. The report
shall be due with respect to sales of Licensed Product sold by PMC sixty (60)
days after the end of the calendar quarter and with respect to sales of
Licensed Product by sublicensees, ninety (90) days after the end of a calendar
quarter. If no such sales have been made, by PMC, its Affiliates and
sublicensees, the report shall so state.
10.2 Payment. Concurrently with the making of each such
report of Section 10.1, PMC shall pay to VRI the royalties at the rate
specified in Article 3 above. All payments by PMC to VRI hereunder shall be
made in U.S. Dollars. If any currency conversion shall be required in
connection with the calculation of royalties hereunder, such conversion shall
be made by using the rate of exchange published in the Wall Street Journal for
the last business day of the applicable calendar quarter.
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<PAGE> 21
10.3 Withholding Taxes. Any withholding or other tax that
PMC or any of its Affiliates are required by statute to withhold and pay on
behalf of VRI with respect to the royalties payable to VRI under this Agreement
shall be deducted from said royalties and paid contemporaneously with the
remittance to VRI; provided, however, that in regard to any tax so deducted PMC
shall furnish VRI with proper evidence of the taxes paid on its behalf. VRI
will furnish PMC with appropriate documents to secure application of the
favorable rate of withholding tax under applicable tax treaties.
10.4 Records; Inspection.
10.4.1 PMC shall keep complete, true and accurate
books of account and records for the purpose of determining the amounts payable
to VRI under this Agreement. Such books and records shall be kept at PMC's
principal place of business for at least three (3) years following the end of
the calendar quarter to which they pertain, and will be open for inspection
during such three (3) year period by a representative of VRI for the purpose of
verifying PMC's royalty statements. Such inspections may be made no more than
once each calendar year, during normal business hours and upon thirty (30) days
prior notice. Any such information shall be considered to be Proprietary
Information of PMC.
10.4.2 Inspections conducted under this Section
10.4 shall be at the expense of VRI, unless an underpayment exceeding five
percent (5%) of the amount paid for the period covered by the inspection is
established in the course of any such inspection, whereupon all costs relating
thereto will be paid by PMC, as well as any unpaid royalties within the thirty
(30) days after requested by VRI.
ARTICLE 11
INDEMNIFICATION AND INSURANCE
11.1 PMC shall defend, indemnify and hold harmless VRI,
Affiliates or VRI and its licensors, and its respective directors, officers,
shareholders, agents, consultants and employees (collectively, the
"Indemnitees") from and against any and all liability, loss, damages and
expenses (including reasonable attorneys' fees) as the result of claims,
demands, costs or judgments which may be made or instituted against any of the
Indemnitees arising out of the manufacture, design, possession, distribution,
use, testing, sale or other disposition by or through PMC and/or Affiliates of
PMC and/or licensees of either PMC or Affiliates of PMC of any Licensed Product
and/or any product or process in connection with or arising out of the Patent
Rights or Licensed Know-How and/or any material provided by PMC or Affiliates
of PMC under this Agreement (in each case, other than any claims, demands,
costs or judgments arising out of, based upon or resulting from infringement of
the intellectual property rights of a third party based upon the use of
polyphosphazene as a part of a mucosally delivered vaccine PMC's obligation to
defend, indemnify and hold harmless shall include any and all such claims,
demands, costs or judgments, including but not limited to
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<PAGE> 22
money damages arising from alleged personal injury (including death) to any
person or alleged property damage. PMC shall have the right to control the
defense of any action which is to be indemnified in whole by PMC hereunder,
including the right to select counsel (which shall be reasonably acceptable to
VRI) to defend the Indemnitees and to settle any claim as to which the
Indemnitees are fully indemnified by PMC. Notwithstanding the foregoing, PMC
shall have no obligation to indemnify or hold any Indemnitee harmless with
respect to any claim, demand, cost or judgment that results or is alleged to
result from the willful misconduct or negligence of an Indemnitee nor to the
extent that VRI has the obligation to indemnify under a Supply Agreement
entered into between the parties pursuant to Section 2.7. If PMC does not
provide counsel to defend the Indemnitees, VRI shall have the right to select
counsel and PMC shall pay the reasonable costs and expenses of said counsel.
The provisions of this paragraph shall survive and remain in full force and
effect after any termination, expiration or cancellation of this Agreement and
PMC's obligation hereunder shall apply whether or not such claims are
rightfully brought.
ARTICLE 12
MISCELLANEOUS
12.1 Publicity. VRI and PMC shall cooperate in the
preparation of a mutually agreeable press release and other publicity
disclosing the existence of this Agreement and their business relationship.
Except for information disclosed in such a mutually agreed press release or
publicity, neither PMC nor VRI shall disclose the existence or any terms of
this Agreement without the prior written consent of the other party, except for
such limited disclosure as may be reasonably necessary to either party's
bankers, investors, attorneys or other professional advisors, or in connection
with a merger or acquisition, or as may be required by law in the offering of
securities or in securities regulatory filings or otherwise.
12.2 Waiver. It is agreed that no waiver by either party
hereto of any breach or default of any of the covenants or agreements herein
set forth shall be deemed a Waiver as to any subsequent and/or similar breach
or default.
12.3 Independent Contractors. The relationship of the
parties hereto is that of independent contractors. Neither party hereto is an
agent, partner or joint venturer of the other for any purpose.
12.4 Compliance with Laws. In exercising its rights under
this license, PMC shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this license.
12.5 Notices. Any notice required or permitted to be
given to the parties hereto shall be deemed to have been properly given if
delivered in person or when received if
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<PAGE> 23
mailed by first-class certified mail or sent by facsimile to the other party at
the appropriate address as set forth below or to such other addresses as may be
designated in writing by the parties from time to time during the term of this
Agreement.
VRI: VIRUS RESEARCH INSTITUTE, INC.
61 Moulton Street
Cambridge, Mass. 02138
Attention: Chief Executive Officer
PMC: PASTEUR MERIEUX SERUMS El VACCINS
58 Avenue Leclerc
Lyon, France
Attention: V.P. Product Development
With Copy to: V.P. Secretary & General Counsel
12.6 Complete Agreement. It is understood and agreed
between VRI and PMC that this Agreement constitutes the entire agreement with
respect to the subject matter of this Agreement, both written and oral, between
the parties, and that all prior agreements respecting the subject matter
hereof, either written or oral, expressed or implied, shall be abrogated,
cancelled, and are null and void and of no effect. No amendment or change
hereof or addition hereto shall be effective or binding on either of the
parties hereto unless reduced to writing and executed by the respective duly
authorized representatives of each of the parties hereto.
12.7 Severability. In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to
be illegal, unenforceable or void, this Agreement shall continue in full force
and effect without said provision and the parties shall exert best efforts to
amend this Agreement to include a provision which is valid, legal and
enforceable and which carries out the original intent of the parties. In the
event that such a provision cannot be included in the Agreement and the absence
thereof materially changes a party's obligations or rights under this
Agreement, such party shall have the right to terminate this Agreement.
12.8 Counterparts and Headings. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original and
both together shall be deemed to be one and the same agreement. All headings
and any cover page or table of contents are inserted for convenience of
reference only and shall not affect its meaning or interpretation.
12.9 Governing Law. All matters affecting the
interpretation, validity and performance under this Agreement shall be governed
by the internal laws of the Commonwealth of Massachusetts without regard for
its conflict of laws principles.
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<PAGE> 24
12.10 Force Majeure. If and to the extent that either
party hereto is prevented, by circumstances not now reasonably foreseeable and
not within its reasonable ability to control, from performing any of its
obligations under this Agreement (other than payment obligations) and promptly
so notifies the other party giving full particulars of the circumstances in
question, then the party affected shall be relieved of liability to the other
for failure to perform such obligations, but shall nevertheless use its best
efforts to resume full performance thereof without avoidable delay, and pending
such resumption shall consult with the other party and shall permit and shall
use its best efforts to facilitate any efforts the other party may make to
effect the performance of such obligations by other means. If such failure to
perform continues for a period of more than one (1) year, the other party may
terminate this Agreement by written notice to the non-performing party with
respect to the rights and licenses with respect to those Licensed Products and
with respect to the failure to obtain regulatory approval for a Licensed
Product shall not be considered to be circumstances within this Section 12.10.
ARTICLE 13
ASSIGNMENT; SUCCESSORS
13.1 This Agreement shall not be assignable by either of
the parties without the prior written consent of the other party (which consent
shall not be unreasonably withheld), except that either party may assign this
Agreement to an Affiliate or to a successor in interest or transferee of all or
substantially all of the portion of the business to which this Agreement
relates.
13.2 Subject to the limitations on assignment herein, this
Agreement shall be binding upon and inure to the benefit of said successors in
interest and assigns of VRI and PMC. In order for such assignment to be
effective any such successor or assignee of a party's interest shall expressly
assume in writing the performance of all the terms and conditions of this
Agreement to be performed by said party and such Assignment shall not relieve
the Assignor of any of its obligations under this Agreement.
IN WITNESS WHEREOF, both VRI and PMC have executed this
Agreement, in duplicate originals, by their respective officers hereunto duly
authorized, the day and year first above written.
VIRUS RESEARCH INSTITUTE, INC. PASTEUR MERIEUX SERUMS ET VACCINS
By: /s/ J. Barrie Ward By: /s/ Herve Tainturier
--------------------------- --------------------------------------
Print Name: J. Barrie Ward Print Name: Herve Tainturier
------------------- ------------------------------
Corporate Vice President, Secretary
Title: Chairman & CEO Title: and General Counsel
------------------------ -----------------------------------
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<PAGE> 25
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
EXHIBIT A
PATENT RIGHTS
1. [****]
2. [****]
3. U.S. PATENT NO. 5,053,451 licensed from The Pennsylvania Research
Corporation
4. U.S. APPLICATION SERIAL NO. [****]
I. M.I.T. Case No. 5400
U.S. Patent 5,149,543
"Ionically Cross-Linked Polymeric Mirocapsules"
By Samdar Cohen, Carmen Bano, Karyn B. Visscher, Marie Chow, Harry B.
Allcock and Robert S. Langer
U.S. Patent 5,308,701
"Ionically Cross-Linked Polymeric Microcapsules"
By Samdar Cohen, Carmen Bano, Karyn B. Visscher, Marie Chow, Harry B.
Allcock and Robert S. Langer
Foreign Patent Applications pending:
[****]
II. M.I.T. Case 5743
U.S. Patent 4,880,662
"Water-Soluble Phosphazene Polymers Having Pharmacological Applications"
By Harry R. Allcock, Paul E. Austin and Sukky Kwon
U.S.S.N.: 434,145 - ABANDONED
"Water-Soluble Phosphazene Polymers Having Pharmacological Applications"
By Harry K. Allcock, Paul E. Austin and Sukky Kwon
Jointly owned with Pennsylvania Research Corporation.
II. M.I.T. Case No. 3985
U.S. Patent No. 4,900,556
"Systems For Delayed And Pulsed Release of Biologically Active
Substances"
-25-
<PAGE> 26
By Herman N. Eisen, Robert S. Langer, Jr. and Margaret A. Wheatley
U.S. Patent No. 4,921,757
"System and Apparatus For Delayed And Pulsed Release of Biologically
Active Substances"
By Herman N. Eisen, Robert S. Langer, Jr. and Margaret A. Wheatley
IV. M.I.T. Case No. 3986
U.S. Patent No. 4,933,185
"System For Controlled Release of Biologically Active Compounds"
By Herman N. Eisen, Robert S. Langer, Jr. and Margaret A. Wheatley
Explanatory Notes
M.I.T. Case No. 4433 -- All patent rights abandoned.
"Polyphosphazene Matrix System for Drug Delivery Applications"
By Cato T. Laurencin, Robert S. Langer, Harry R. Allcock and Thomas X.
Neenan U.S.S.N. 737,921
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<PAGE> 27
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
EXHIBIT B
PMC PROPRIETARY RIGHTS
[****]
-27-
<PAGE> 28
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
EXHIBIT C
MILESTONES TO BE MET BY PMC
[****]
-28-
<PAGE> 29
The information below marked by [****] has been omitted pursuant to a request
for Confidential Treatment. The omitted portion has been separately filed with
the Commission.
EXHIBIT D
RESEARCH PROGRAM
[****]
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<PAGE> 1
EXHIBIT 10.23
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by [****], have been
separately filed with the Commission.
COLLABORATIVE RESEARCH AND
LICENSE AGREEMENT
BETWEEN
VIRUS RESEARCH INSTITUTE Inc.
AND
SMITHKLINE BEECHAM plc
<PAGE> 2
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 RESEARCH PROGRAM . . . . . . . . . . . . . . . . . . 12
ARTICLE 3 MANAGEMENT OF THE RESEARCH PROGRAM . . . . . . . . . 24
ARTICLE 4 GRANTS COVENANTS . . . . . . . . . . . . . . . . . . 27
ARTICLE 5 ROYALTIES AND OTHER PAYMENTS . . . . . . . . . . . . 30
ARTICLE 6 ROYALTY REPORTS AND ACCOUNTING . . . . . . . . . . . 34
ARTICLE 7 DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 8 EXCHANGE OF INFORMATION AND CONFIDENTIALITY . . . . . 37
ARTICLE 9 PATENTS AND TRADEMARKS . . . . . . . . . . . . . . . 41
ARTICLE 10 TERM AND TERMINATION . . . . . . . . . . . . . . . . 48
ARTICLE 11 RIGHTS AND DUTIES UPON TERMINATION . . . . . . . . . 50
ARTICLE 12 WARRANTIES AND REPRESENTATIONS . . . . . . . . . . . 50
ARTICLE 13 FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 14 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 15 WAIVER OR BREACH . . . . . . . . . . . . . . . . . . 52
ARTICLE 16 SEPARABILITY . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 17 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . 52
ARTICLE 18 NOTICES . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 19 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 20 RECORDING . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 21 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 54
APPENDIX A PATENTS . . . . . . . . . . . . . . . . . . . . . . . 58
APPENDIX B VRI/SB COLLABORATIVE [****] RESEARCH PLAN . . . . . . 59
APPENDIX C VRI THIRD PARTY AGREEMENTS . . . . . . . . . . . . . 53
APPENDIX D KNOWN [****] GENES AND SEQUENCES . . . . . . . . . . 54
</TABLE>
i
<PAGE> 3
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
THIS COLLABORATIVE RESEARCH AND LICENSE AGREEMENT, effective as of the
22nd day of June, 1995, between VIRUS RESEARCH INSTITUTE, Inc., a corporation
of the state of Delaware, having a place of business at 61 Moulton Street,
Cambridge MA 02139, and SMITHKLINE BEECHAM plc, a company organized under
English law and having its registered office at New Horizons Court, Brentford,
Middlesex TW8 9EP, England, registered in England No. 2337959.
WITNESSETH THAT:
WHEREAS, Virus Research Institute, Inc. has rights in and to certain
In Vivo Expression Technologies (hereinafter "IVET" as defined below);
WHEREAS, Virus Research Institute, Inc. is the owner of all right,
title and interest in or is the licensee of VRI TECHNOLOGY (as defined below);
WHEREAS, SmithKline Beecham plc desires that Virus Research Institute
practice IVET on SmithKline Beecham's behalf;
WHEREAS, SmithKline Beecham plc also desires to obtain worldwide
licenses from Virus Research Institute, Inc. under the aforesaid VRI
TECHNOLOGY and Virus Research Institute, Inc. is willing to grant to SmithKline
Beecham plc such licenses;
WHEREAS, SmithKline Beecham plc and Virus Research Institute, Inc.
desire to engage in a research collaboration directed to the application of
IVET to [****] and to the identification of novel in vivo expressed genes
derived therefrom; and
WHEREAS, SmithKline Beecham plc desires to use the information
developed during the research collaboration, inter alia, to develop screens to
identify useful antimicrobial products;
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein, and intending to be legally bound, and otherwise to be bound
by proper and reasonable conduct, the parties agree as follows:
<PAGE> 4
ARTICLE 1
DEFINITIONS
The forms used in this Agreement have the following meanings:
1.01 "AFFILIATES" shall mean any corporation, film, partnership or
other entity, whether de jure or de facto, which directly or indirectly owns,
is owned by or is under common ownership with SB or VRI to the extent of at
least fifty percent (50%) of the equity (or such lesser percentage which is the
maximum allowed to be owned by a foreign corporation in a particular
jurisdiction) having the power to vote on or direct the affairs of the entity
and any person, firm, partnership, corporation or other entity actually
controlled by, controlling or under common control with SB or VRI. A
corporation or other entity which is under the common control with VRI only as
a result of equity investments by a common, independent venture capital entity
is not an AFFILIATE of VRI and an independent venture capital entity which owns
at least fifty percent of the equity of VRI is not an AFFILIATE of VRI.
1.02 "COMBINATION PRODUCT" shall mean a PRODUCT which is sold in
combination with (i) one or more therapeutically or prophylactically active
compounds derived independently of this Agreement, in the case of therapeutics
or (ii) one or more diagnostic agents derived independently of this Agreement
in the case of diagnostics. COMBINATION PRODUCTS are included in the term
"PRODUCT".
1.03 "COMMENCEMENT DATE" shall mean 22 June 1995, which shall be
the date of commencement of the RESEARCH PROGRAM.
1.04 "COMPETING PRODUCT" with respect to a particular PRODUCT sold
by SB or VRI or a licensee of either, shall mean any product sold by a THIRD
PARTY which is the same as such PRODUCT.
1.05 "COMPETING VACCINE PRODUCT" with respect to a particular
VACCINE PRODUCT sold by VRI or SB or a licensee of either shall mean any
product sold by a THIRD PARTY which is the same as such VACCINE PRODUCT.
1.06 "CONTRACT YEAR" shall mean the twelve (12) month period from
the COMMENCEMENT DATE and each subsequent consecutive twelve (12) month period
during the RESEARCH PROGRAM TERM.
1.07 "FDA" shall mean the United States Food and Drug
Administration or any successor entity thereto.
2
<PAGE> 5
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
1.08 "IVET" shall mean In Vivo Expression Technology and refers to
technology originally described by Mahan et al. (Science 259:686-689 (1993))
and any and all improvements thereto made by or to which VRI has rights
independent of this Agreement including but not [****] which technology
identifies bacterial genes the expression of which is induced in the host
environment.
1.09 [****]
1.10 [****]
1.11 "NDA" shall mean a New Drug Application or Product License
Application filed by or on behalf of SB with the FDA.
1.12 "PATENT(S)" shall mean all patents and patent applications
which are or become owned by VRI and/or SB, or to which VRI and/or SB otherwise
has, now or in the future, the right to grant licenses, which generically or
specifically claim VRI TECHNOLOGY, SB RP TECHNOLOGY, RESEARCH PROGRAM OUTPUT,
PRODUCT, a process for manufacturing PRODUCT, a process for discovery of a
PRODUCT or an intermediate used in such processes or a use of PRODUCT.
Included within the definition of PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, provisionals, reissues,
renewals or extensions thereof. Also included within the definition of PATENTS
are any patents or patent applications which generically or specifically claim
any improvements of PRODUCT, methods for discovering PRODUCT or intermediates
or manufacturing processes required or useful for production of PRODUCT which
are developed by SB and/or VRI, or which SB and/or VRI otherwise has the right
to grant licenses, now or in the future, during the term of this Agreement.
The current list of patent applications and patents encompassed within PATENTS
is set forth in Appendix A attached hereto which shall be periodically updated.
PATENTS specifically excludes patents and patent applications owned by VRI
which are directed to IVET or as to which VRI has a right to grant a license
and which are directed to IVET. PATENTS include SPCs.
1.13 "PHASE II" shall mean studies (as defined in 21 C.F.R. Section
312.21(b)) in human subjects designed to demonstrate the effectiveness of a
compound.
1.14 "PHASE III" shall mean large scale, multi-center, pivotal
efficacy studies (as defined in 21 C.F.R. Section 312.21(c)) in human
subjects which are adequate, well-controlled (as those terms are defined in 21
C.F.R. Section 314.126) and which are intended to gather additional
information about the effectiveness and safety of a compound including by
comparing treatment with PRODUCT to treatment with a positive control agent
and/or placebo.
3
<PAGE> 6
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
1.15 "PRODUCT" shall mean: (a) any composition of matter (e.g.,
chemical compound (including polynucleotides)), diagnostic agent, or diagnostic
service identified [****] which results in whole or in part from use of
RESEARCH PROGRAM OUTPUT, for example, including but not limited to, by
screening against a RESEARCH PROGRAM OUTPUT, and (b) chemical compounds which
are based on or derived from the compositions of matter of 1.15(a) [****]
provided that PRODUCT shall not include such compositions of matter which were
published by others as having [****] prior to the COMMENCEMENT DATE. PRODUCT
includes SB PRODUCT, SB VACCINE, VRI PRODUCT, VACCINE PRODUCT and COMBINATION
PRODUCT.
1.16 "PSB" shall mean a Pharmaceutical Services Business and
includes any present or future AFFILIATE of SB or its licensees which conducts
pharmaceutical benefits management for THIRD PARTIES or conducts any of the
following business activities for or on behalf of THIRD PARTIES: wholesaler
distribution, pharmacy distribution, disease management services, hospital
services, or mail order prescription pharmacy services. As of the COMMENCEMENT
DATE, the only AFFILIATES of SB which are PSBs are Diversified Pharmaceutical
Services, a corporation of the state of Minnesota, having a place of business
at 3600 West 80th Street, Seventh Floor, Bloomington, Minnesota 55431-1085, and
Prescription Delivery Systems, a corporation of the Commonwealth of
Pennsylvania, having a place of business at 206 Welsh Road, Horsham,
Pennsylvania 19044.
1.17 "RESEARCH COORDINATING COMMITTEE" or "RCC" shall mean the
research management committee composed of representatives of VRI and SB
described in Section 3.1 hereof.
1.18 "RESEARCH PROGRAM" shall mean the program of research with
respect to the [****] performed in accordance with the research plan attached
hereto as Appendix B. The RESEARCH PROGRAM may be modified as necessary from
time to time by the RCC.
1.19 [****]
1.20 "RESEARCH PROGRAM TERM" shall mean the two (2) year period of
the RESEARCH PROGRAM measured from the COMMENCEMENT DATE and any extensions
thereof resulting from mutual agreement of the parties as set forth in Section
2.3 below.
1.21 "SB" shall mean SmithKline Beecham plc. In addition, for the
purposes of Sections 1.12, 1.24 and 1.26, SB as used therein also includes
AFFILIATES of SB.
4
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
1.22 "SB DEVELOPMENT STATUS" [****]
1.23 "SB FIELD OF USE" shall mean the prophylaxis, treatment or
diagnosis of disease in humans with any PRODUCT other than a VACCINE PRODUCT.
1.24 "SB NET SALES" shall mean the gross receipts from sales of SB
PRODUCT under this Agreement:
(a) in finished product form (i.e., packaged for sale to
the ultimate consumer) in the TERRITORY by SB and/or its licensees to THIRD
PARTIES; or if not sold by SB and/or its licensees in finished form, then
(b) in any product form other than finished product form
in the TERRITORY by SB and/or its licensees to distributors or other entities
who subsequently convert such into finished product form, provided that such
distributors or other entities shall not be considered to be licensees for the
purposes of this SB NET SALES definition because of such converting, however,
in a country where SB sells other than finished product form to a distributor,
in the event SB realizes additional income from said distributor other than SB
NET SALES and such additional income is specifically related to the sale of SB
PRODUCT, then SB shall pay royalties to VRI based on the said distributor's
sales to THIRD PARTIES; less deductions actually invoiced and/or specifically
allocated to SB PRODUCT by SB using generally accepted accounting standards for
(i) transportation charges, including transportation insurance; (ii) sales and
excise taxes and duties paid or allowed by a selling party and any other
governmental charges imposed upon the production, importation, use or sale of
such SB PRODUCT; (iii) trade and quantity discounts allowed; (iv) allowances or
credits to customers on account of rejection or return of SB PRODUCT subject to
royalty under this Agreement or on account of retroactive price reductions
affecting such SB PRODUCT; and (v) rebates and chargebacks. Sales between or
among SB and its AFFILIATES and/or their licensees shall be excluded from the
computation of SB NET SALES, except where such AFFILIATES or licensees are end
users or where such AFFILIATES or licensees are a PSB, but SB NET SALES shall
include the subsequent sales to THIRD PARTES.
1.25 "SB PRODUCT" shall mean all PRODUCTS except VRI PRODUCT and
VACCINE PRODUCT, [****]
1.26 "SB RESEARCH PROGRAM (RP) TECHNOLOGY" shall mean any and all
data, substances, formulas, processes, information, materials, know-how,
inventions, discoveries, (whether patentable or not) or other information which
in whole or in part (i) results from use of VRI TECHNOLOGY or RESEARCH PROGRAM
OUTPUT by or on behalf of SB or (ii) is developed by or on behalf of SB during
and as a result of the
5
<PAGE> 8
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
RESEARCH PROGRAM, provided, SB RP TECHNOLOGY shall not include such data,
substances, formulas, processes, information, materials, know-how, inventions,
discoveries, or other information which result only from an incidental or
immaterial use of VRI TECHNOLOGY or RESEARCH PROGRAM OUTPUT or which does not
relate to PRODUCT or RESEARCH PROGRAM OUTPUT.
1.27 [****]
1.28 "SB VACCINE" shall mean a VACCINE PRODUCT in the VRI FIELD OF
USE which results from use of an SB VACCINE GENE.
1.29 "SB VACCINE GENE" shall have the meaning set forth in Section
2.5.3(c)(i).
1.30 "SPC" shall mean a right based upon a PATENT to exclude others
from making, using or selling PRODUCT, such as a Supplementary Protection
Certificate.
1.31 "TERRITORY" shall mean [****]
1.32 "THIRD PARTY" shall mean, as to SB an entity other than SB or
an AFFILIATE of SB and as to VRI an entity other than VRI or an AFFILIATE of
VRI.
1.33 "VACCINE" [****]
1.34 "VACCINE PRODUCT" shall mean a PRODUCT which is a prophylactic
VACCINE, including a DNA vaccine product.
1.35 "VRI" shall mean Virus Research Institute, Inc. and AFFILIATES
of VRI.
1.36 "VRI FIELD OF USE" shall mean the prevention of microbial
infections in humans by the use of a VACCINE PRODUCT.
1.37 "VRI NET SALES" shall mean the gross receipts from sales of
VRI PRODUCT by VRI, under this Agreement:
(a) in finished product form (i.e., packaged for sale to
the ultimate consumer) in the TERRITORY by VRI and/or its licensees to THIRD
PARTIES; or if not sold by VRI, and/or its licensees in finished form, then
(b) in any product form other than finished product form
in the TERRITORY by VRI, and/or its licensees to distributors or other entities
who subsequently
6
<PAGE> 9
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
convert such into finished product form, provided that such distributors or
other entities shall not be considered to be licensees for the purposes of this
VRI NET SALES definition, however, in a country where VRI sells other than
finished product form to a distributor, in the event VRI realizes additional
income from said distributor other than VRI "NET SALES" and such additional
income is specifically related to the sale of VRI PRODUCT, then VRI shall pay
royalties to SB based on the said distributor's sales to THIRD PARTIES; less
deductions actually invoiced and/or specifically allocated to VRI PRODUCT by
VRI using generally accepted accounting standards for (i) transportation
charges, including transportation insurance; (ii) sales and excise taxes and
duties paid or allowed by a selling party and any other governmental charges
imposed upon the production, importation, use or sale of such VRI PRODUCT;
(iii) trade and quantity discounts allowed; (iv) allowances or credits to
customers on account of rejection or return of VRI PRODUCT subject to royalty
under this Agreement or on account of retroactive price reductions affecting
such VRI PRODUCT; and (v) rebates and chargebacks. Sales between or among VRI
and its AFFILIATES and/or their licensees shall be excluded from the
computation of VRI NET SALES, except where such AFFILIATES or licensees are end
users, but VRI NET SALES shall include the subsequent sales to THIRD PARTIES.
1.38 "VRI PRODUCT" shall mean a PRODUCT in the SB FIELD OF USE
which results from use of a VRI TARGET GENE and shall also mean a VACCINE
PRODUCT excluding SB VACCINE.
1.39 "VRI TARGET GENE" shall have the meaning set forth in Section
2.5.3(c)(i).
1.40 "VRI TECHNOLOGY" shall mean any data and all substances,
formulas, processes, information, materials, know-how, inventions, discoveries,
(whether patentable or not), [****] provided by VRI to SB, and/or which is
useful in the SB FIELD OF USE or the VRI FIELD OF USE and/or (ii) developed by
or on behalf of VRI as a result of the RESEARCH PROGRAM or use of RESEARCH
PROGRAM OUTPUT, which In each of (i) or (ii) is owned by VRI and/or under which
VRI has the right to grant licenses during the term of this Agreement. VRI
TECHNOLOGY specifically excludes IVET.
1.41 "VRI VACCINE GENE" shall mean [****]
The use herein of the plural shall include the singular.
7
<PAGE> 10
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
ARTICLE 2
RESEARCH PROGRAM
2.1 Research Procedures.
2.1.1 Conduct of Research. VRI and SB each shall conduct
the work assigned to it in the RESEARCH PROGRAM, as more particularly set forth
in the research plan which is set forth in Appendix B hereto and as requested
by the RCC, in good scientific manner, and in compliance in all material
respects with all requirements of applicable laws and regulations and with all
applicable good laboratory practices and good manufacturing practices to
attempt to achieve its objectives efficiently and expeditiously. Vial SB each
shall proceed diligently with the work set out in the RESEARCH PROGRAM assigned
to it by using their respective reasonable efforts to provide, among others,
the following resources:
(a) [****]
(b) in the case of SB, allocation of a reasonable
amount of time and effort, using personnel with sufficient skills and
experience, together with sufficient equipment and facilities, to carry out
SB's obligations under the RESEARCH PROGRAM set forth in Appendix B hereto.
2.1.2 [****]
2.1.3 Use of Research Funding. VRI warrants and represents
that it will apply the research funding it receives from SB under this
Agreement directly and solely toward achieving the objectives of the RESEARCH
PROGRAM pursuant to this Agreement.
2.1.4 Subcontracts. [****] VRI nor SB shall subcontract to
THIRD PARTIES the whole or any portion of those aspects of the RESEARCH PROGRAM
to be performed by it without the prior consent of the RCC, which consent shall
not be unreasonably withheld; provided, however, that a party shall have the
right to contract for custom synthesis and other routinely used outside
services in accordance with its standard procurement practices. All
subcontractors shall enter into confidentiality agreements with a party to this
Agreement, and all subcontracted work shall be performed in compliance with
applicable laws and regulations, together with all applicable good laboratory
practices and good manufacturing practices. The contracting party shall
supervise and be responsible under this Agreement for such subcontracted work.
8
<PAGE> 11
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
2.2 Funding of the RESEARCH PROGRAM.
(a) In consideration for VRI's performance of its
obligations under the RESEARCH PROGRAM, SB will pay to VRI a research fee of
Five Hundred and Fifty Thousand (U.S. $550,000) Dollars per year for a period
of two (2) years, subject to SB's determination of VRI's satisfactory progress
[****] The research fees shall be paid in advance in accordance with the
following schedule, provided, however, that adjustments will be made as set
forth in Section 2.2(b).
<TABLE>
<CAPTION>
Within 30 days of: US $
----------------- ----
<S> <C>
COMMENCEMENT DATE 137,500.00*
October 1, 1995 137,500.00*
January 1, 1996 137,500.00
April 1, 1996 137,500.00
July 1, 1996 137,500.00
October 1, 1996 137,500.00
January 1, 1997 137,500.00
April 1, 1997 137,500.00
</TABLE>
* The receipt by VRI of these payments is hereby acknowledged.
(b) The payment of $550,000 per year is based on a
payment rate [****] such that the total amount paid by SB shall not exceed U.S.
$1,100,000 Dollars (assuming satisfactory progress and achievement by VRI of
MILESTONE I). If at the end of an even numbered quarter there has been an
overpayment by SB to VRI for that and the preceding quarter, then the
overpayment may be credited by SB against the next quarterly payment due VRI
after notice of the overage.
(c) The annual research fee of $550,000 shall be the
maximum amount SB shall be obligated to pay VRI for its services as part of the
RESEARCH PROGRAM per year and as such represents the fully loaded costs of VRI
of employing the requisite FTEs, including but not limited to salaries, travel,
supplies and overheads. VRI shall be responsible for any additional costs
incurred by VRI, unless SB has agreed in writing in advance to pay any amount
beyond the annual research fee.
(d) VRI shall not be obligated to perform any work beyond
that funded by SB under this Section 2.2.
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
2.3 Extension of RESEARCH PROGRAM TERM. [****]
2.4 Additional Targets. The parties may mutually agree to
increase the scope of the RESEARCH PROGRAM to include the discovery and
development of gene targets in additional microbial species. If the increase
in scope is mutually agreed [****]. The other terms of the agreement shall be
substantially the same as the terms of this Agreement.
2.5 Exclusivity.
2.5.1 [****]
2.5.2 [****]
2.5.3 [****]
2.5.4 Subject to Section 2.5.3(c) and 2.5.3(d), after
termination of the RESEARCH PROGRAM, SB shall have the right to continue to
research and develop RESEARCH PROGRAM OUTPUTS in the SB FIELD OF USE and to the
extent necessary shall have the right to use so much of VRI TECHNOLOGY (other
than IVET) and RESEARCH PROGRAM OUTPUT, as has been provided to SB during the
RESEARCH PROGRAM TERM for the purpose of, inter alia, continuing development of
an SB PRODUCT in the SB FIELD OF USE [****] continuing discovery of new
compounds, and continuing the identification and development of targets for
eventual screening for SB PRODUCT in the SB FIELD OF USE and [****]
2.5.5 [****]
2.5.6 [****]
2.6 Records and Reports.
2.6.1 Records. VRI and SB each shall maintain records, in
sufficient detail and in good scientific manner appropriate for patent
purposes, and, in the case of VRI, to verify the calculation of the annual
research fee and VRI's allocation of VRI scientists to the RESEARCH PROGRAM as
required under Section 2.1.1(a). Such records shall be complete and accurate
and shall fully and properly reflect all work done and results achieved in the
performance of the RESEARCH PROGRAM (including all data in the form required
under all applicable laws and regulations). Such records shall include books,
records, reports, research notes, charts, graphs, comments, computations,
analyses, recordings, photographs, computer programs and documentation thereof,
computer information storage means, samples of
10
<PAGE> 13
materials and other graphic or written data generated in connection with the
RESEARCH PROGRAM including any data required to be maintained pursuant to all
requirements of applicable laws and regulations.
2.6.2 Inspection of Records. Once each CONTRACT YEAR, VRI
and SB, each at its own cost, shall have the right during normal business hours
and upon reasonable notice, to inspect and copy all such records of the other
party to the extent reasonably required for the performance of its obligations
under this Agreement (with the party owning the records determining what is
reasonably required). Each party shall maintain such records and the
information of the other party contained therein in confidence in accordance
with Article 8 below and shall not use such records or information except to
the extent otherwise permitted by the Agreement.
2.6.3 Research Reports. VRI and SB each shall keep the
other party fully informed as to all discoveries and technical developments
made in the course of the RESEARCH PROGRAM. VRI and SB each shall prepare, and
distribute to the other party, a reasonably detailed written summary report at
such times, in such form and setting forth such information regarding the
RESEARCH PROGRAM as determined from time to time by the RCC. Additionally, VRI
may be required to make a formal presentation to the appropriate SB management
committee at an SB location and at VRI's expense. Written notice of such
presentation shall be given to VRI at least thirty (30) days in advance of the
presentation. However, no more than two such presentations per year will be
required and every effort will be made to schedule any such presentation(s) at
the time of a regularly scheduled RCC meeting at an SB location.
2.7 Known Antimicrobial Targets and Compounds. From time to time
SB may employ RESEARCH PROGRAM OUTPUT or an SB TARGET GENE or a screen derived
therefrom for purposes of confirmation or further characterization of target
genes or antimicrobial compounds identified by SB or on SB's behalf
independently of the RESEARCH PROGRAM and not involving the use of VRI
TECHNOLOGY or SB RP TECHNOLOGY or RESEARCH PROGRAM OUTPUT.
(a) If SB merely confirms the activity of such target
genes or antimicrobial compounds through use of such RESEARCH PROGRAM OUTPUT,
SB TARGET GENE or screen derived therefrom and then subsequently develops
and/or markets said genes or compounds without further use of such RESEARCH
PROGRAM OUTPUT, SB TARGET GENE or screen derived therefrom, then no payments or
royalties of any kind shall be due VRI.
11
<PAGE> 14
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
(b) However, in the event that SB performs additional
work using such RESEARCH PROGRAM OUTPUT, SB TARGET GENE or screen derived
therefrom, and develops and markets said compound or gene or a derivative
thereof, [****]
ARTICLE 3
MANAGEMENT OF THE RESEARCH PROGRAM
3.1 Research Coordinating Committee.
3.1.1 Composition of the RCC. The RESEARCH PROGRAM shall
be conducted under the direction of the RCC. [****] Each party may replace one
or more of its representatives on the RCC at any time in its sole discretion.
In addition, if a regular member of the RCC cannot attend a meeting of the
committee, an alternate for that meeting shall be appointed by the missing
member's employer. In order to ensure continuity of action, a party's
designated alternate may attend RCC meetings as a non-voting observer, even if
all representatives are present.
3.1.2 Responsibilities of the RCC. The purposes of the RCC
shall be to oversee and coordinate the RESEARCH PROGRAM. As part of its
responsibilities, the RCC shall (a) review the research by VRI and SB under the
RESEARCH PROGRAM, (b) monitor the progress of the RESEARCH PROGRAM and evaluate
the work performed and the results obtained in relation to the goals of the
RESEARCH PROGRAM, (c) plan future activities under, and make any necessary or
desirable modifications to the RESEARCH PROGRAM, (d) recommend targets for
further evaluation by the parties under the RESEARCH PROGRAM and approve
selection of VRI VACCINE GENES as provided in 2.5.2(b), (e) approve the VRI
work plan for each quarter of a CONTRACT YEAR under which VRI scientists are
deployed in the RESEARCH PROGRAM, (I) facilitate the exchange of information
between SB and VRI relating to the RESEARCH PROGRAM, and (g) attempt resolution
of disputes between the parties concerning the RESEARCH PROGRAM. Nothing
herein shall be construed as limiting the discretion of SB management in
allocating its human and other resources in accordance with priorities it
assigns its various efforts and opportunities within and outside the scope of
this Agreement.
3.1.3 Meetings Of the RCC. The RCC shall meet at least
twice each year during the term of the RESEARCH PROGRAM, at such times and
places as agreed to by VRI and SB, alternating between Cambridge, Massachusetts
USA and SB facilities in the
12
<PAGE> 15
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
Philadelphia; Pennsylvania area (including e.g., Upper Merion and Collegeville,
Pennsylvania) or such other Locations as the parties may agree. The first such
meeting will be held within five months of the COMMENCEMENT DATE. Meetings of
the RCC may be attended by such other directors, officers, employees,
consultants and other agents of VRI and SB as the parties from time to time
reasonably agree. The party hosting each meeting of the RCC promptly shall
prepare, and deliver to the other party within thirty (30) days after the date
of such meeting, minutes of such meeting setting forth all decisions of the RCC
relating to the RESEARCH PROGRAM in form and content reasonably acceptable to
the other party.
3.1.4 Actions by the RCC. Any approval, determination or
other action agreed to by a majority of the SB and VRI members of the RCC
present at the relevant RCC meeting shall be the approval, determination or
other actions of the RCC; provided, however, that at least two (2)
representatives of each party shall be present at such meeting. In the event
the RCC cannot arrive at a majority decision on a particular issue, the
Chairman shall cast the deciding vote.
3.2 Project Leaders. VRI and SB each shall appoint a person (a
"Project Leader") to coordinate its part of the RESEARCH PROGRAM. The Project
Leaders shall be the primary contacts between the parties with respect to the
RESEARCH PROGRAM. As of the COMMENCEMENT DATE the Project Leader for VRI
[****] Each party shall notify the other party as soon as practicable upon
changing these appointments.
3.3 Availability Of Employees. Each party shall make its
employees engaged in the RESEARCH PROGRAM available, upon reasonable notice
during normal business hours, at their respective places of employment to
consult with the other party on issues arising during the RESEARCH PROGRAM and
in connection with any request from any regulatory agency, including
regulatory, scientific, technical and clinical testing issues.
3.4 Visits to Facilities. Representatives of VRI and SB may, upon
reasonable notice during normal business hours, (a) visit VRI's facilities
where the RESEARCH PROGRAM is being conducted, (b) consult informally, during
such visits and by telephone, with personnel of the other party performing work
on the RESEARCH PROGRAM, and (c) with the other party's prior approval, which
approval shall not be unreasonably withheld, visit the sites of any experiments
being conducted by such other party in connection with the RESEARCH PROGRAM,
but only to the extent in each case such other experiments relate to PRODUCTS.
On such visits, an employee of the party conducting the research or development
shall accompany the employee(s) of the visiting party. If requested by the
other party, VRI and SB shall cause appropriate individuals working on the
RESEARCH PROGRAM to be available for meetings at the location of the facilities
where such
13
<PAGE> 16
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
individuals are employed at times reasonably convenient to the party responding
to such request.
ARTICLE 4
GRANTS & COVENANTS
4.1 Grant to SB. VRI hereby grants to SB a world-wide, exclusive
license, with the right to grant sublicenses, under PATENTS of VRI whether
solely owned or jointly owned with SB and VRI TECHNOLOGY [****] (i) to conduct
research to discover SB PRODUCTS within the SB FIELD OF USE [****] (ii) to
make, have made, use and sell SB PRODUCTS within the SB FIELD OF USE [****] and
(iii) otherwise to exercise its rights under Article 2, [****] (It is
understood that by "make, have made, use and sell" is meant all activities
encompassed within the exclusionary right conferred by patents in a given
jurisdiction). SB shall have the right to develop and sell outside of the SB
FIELD OF USE, but not in the VRI FIELD OF USE, those SB PRODUCTS it has
selected for development within the SB FIELD OF USE.
4.2 Grant to VRI. SB hereby grants to VRI a world-wide, exclusive
license, with the right to grant sublicenses, under PATENTS of SB whether
solely owned or jointly owned with VRI and SB RP TECHNOLOGY (i) to conduct
research to discover VACCINE PRODUCTS [****] within the VRI FIELD OF USE and
also VRI PRODUCTS, (ii) or make, have made, use and sell VACCINE PRODUCTS
[****] within the VRI FIELD OF USE and also VRI PRODUCTS except those VRI
PRODUCTS selected by SB for development under Section 2.5.6 and (iii) otherwise
to exercise its rights under Article 2. (It is understood that by "make, have
made, use and sell" is meant all activities encompassed within the exclusionary
right conferred by patents in a given jurisdiction).
4.3. Third Parties.
4.3.1 To the extent VRI TECHNOLOGY and/or PATENTS of VRI
licensed to SB under this Agreement are rights which VRI has licensed or will
license from a THIRD PARTY ("THIRD PARTY Agreement(s)") the rights licensed to
SB by VRI under this Agreement are subject to the terms, limitations and
restrictions of the THIRD PARTY Agreement(s).
4.3.2 SB will be sublicensed under THIRD PARTY Agreements
only if SB agrees to be bound by the terms and conditions thereof which are
applicable to a sublicensee. In the event that SB does not agree to be bound
by the terms and conditions of a THIRD PARTY Agreement under which SB is
entitled to a sublicense pursuant to this Agreement,
14
<PAGE> 17
then to the extent and for the period that SB is entitled to a sublicense under
such THIRD PARTY Agreement, VRI shall not use itself or grant such rights to a
THIRD PARTY. Prior to entering into a THIRD PARTY Agreement as to which SB is
entitled to a sublicense under this Agreement, VRI shall notify SB as to the
prospective terms and conditions thereof which are applicable to a sublicensee
and if requested by SB to modify such terms, VRI will use its best efforts to
obtain the requested modifications prior to entering into such THIRD PARTY
Agreement. SB hereby agrees to be bound by the terms and conditions which are
applicable to a sublicensee of the THIRD PARTY Agreement listed in Appendix C
as of the date of execution of this Agreement.
4.3.3 To the extent it is necessary to license or otherwise
acquire the rights of THIRD PARTY(IES) in order for VRI to practice IVET on
behalf of SB hereunder, it shall be VRI's sole responsibility to acquire such
rights at VRI's sole expense.
4.4 SB Use of Technology. To the extent the technologies
identified in this section 4.4 are not in the public domain and are not claimed
in granted PATENTS, SB agrees that VRI TECHNOLOGY will be used by SB only for
research, developing, making, marketing and selling of SB PRODUCTS in
accordance with the terms and conditions of this Agreement including without
limitation Section 2.5. SB will not use SB RP TECHNOLOGY and/or VRI
TECHNOLOGY for making, using or selling of SB PRODUCT or VRI PRODUCT in any and
all countries in which SB's license under Section 4.1 has been rightfully
terminated, except to the extent that VRI TECHNOLOGY is acquired from a source
other than VRI.
4.5 VRI Use of Technology. To the extent the technologies
identified in this Section 4.5 are not in the public domain and are not claimed
in granted PATENTS, VRI agrees that SB RP TECHNOLOGY will be used by VRI only
for research, developing, making, marketing and selling of VRI PRODUCT in
accordance with the terms and conditions of this Agreement including without
limitation Section 2.5. VRI will not use SB RP TECHNOLOGY for any purpose in
any and all countries in which VRI's license under Section 4.2 has been
rightfully terminated, except to the extent that SB RP TECHNOLOGY is acquired
from a source other than SB.
4.6 AFFILIATES of SB. It is understood that the license rights
granted to SB under this Agreement do not extend to AFFILIATES of SB and
therefore any AFFILIATE of SB who engages in activities encompassed within the
scope of this Agreement shall be regarded as a licensee of SB regardless of
whether or not a formal license agreement has been entered into and shall be
obligated to VRI as provided for in Section 4.8 below.
4.7 SB shall cause each of its AFFILIATES to comply with all
terms, conditions and obligations of this Agreement as if each such AFFILIATE
is a signatory to this Agreement and SB shall be liable and responsible to VRI
for any failure of any AFFILIATE of SB to comply with the terms, conditions and
obligations of this Agreement.
15
<PAGE> 18
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
4.8 The parties hereby agree that no license or sublicense will be
granted to a THIRD PARTY by either party hereto with respect to PRODUCT,
VACCINE PRODUCT, SB VACCINE, SB PRODUCT or VRI PRODUCT without such THIRD PARTY
agreeing with the licensing party to be bound by the terms, obligations and
conditions [****]
ARTICLE 5
ROYALTIES AND OTHER PAYMENTS
5.1 Milestone Payments. In addition to the funding of the
RESEARCH PROGRAM as provided in Section 2.2 above, as consideration for the
licenses granted to SB hereunder and VRI's participation in the RESEARCH
PROGRAM in accordance with the terms of this Agreement, SB shall pay VRI up to
three million, two hundred thousand U.S. dollars (U.S. $3,200,000) in
installments according to the following milestones, within thirty (30) days
after the occurrence of the key events listed below, provided that in no event
(except as provided in Section 2.5.5) shall the total amount of such payments
exceed three million, two hundred thousand U.S. dollars (U.S. $3,200,000).
[****]
(a) each payment which is owed in accordance with this
Section 5.1 shall be made only one time regardless of the number of times a
particular milestone is met, and no payment shall be owed for a milestone which
is not reached;
(b) [****]
(c) [****]
(d) fifty (50%) percent of the amounts of [****] shall be
creditable against future royalties payable by SB to VRI. [****]
5.2 Royalties Payable by SB.
5.2.1 In consideration for the licenses to PATENTS of VRI
granted to SB herein and for the enabling VRI TECHNOLOGY practiced by VRI on
SB's behalf, SB will The information below marked by [****] has been omitted
pursuant to a request for confidential treatment. The omitted portion has been
separately filed with the Commission.
16
<PAGE> 19
pay to VRI a royalty of [****] of SB NET SALES of SB PRODUCT in the TERRITORY,
except as expressly otherwise provided in this Agreement.
5.2.2 [****]
5.2.3 The royalty payable for SB PRODUCT in any calendar
year shall be reduced to fifty (50%) percent of the royalties provided in
Section 5.2.1 and 5.2.2 as regards SB NET SALES in any country in the TERRITORY
in which one or more THIRD PARTY(IES) sells a COMPETING PRODUCT or a COMPETING
VACCINE PRODUCT in such country in such calendar year in substantial
competition with SB, by which is meant that the value of such COMPETING PRODUCT
or COMPETING VACCINE PRODUCT in such country in such calendar year of any THIRD
PARTY(IES) combined is at least fifteen percent (15%) of the SB NET SALES of
the SB PRODUCT in such country in such calendar year.
5.3 Royalties payable by VRI.
5.3.1 In consideration for the licenses to PATENTS of SB,
and access to SB RP TECHNOLOGY VRI will pay to SB royalties at the rate of
[****] per VRI PRODUCT based on the VRI NET SALES of each VRI PRODUCT in any
country in the TERRITORY, except as expressly otherwise provided in this
Agreement.
5.3.2 [****]
5.4 COMBINATION PRODUCTS. The royalty payable on the SB NET SALES
or VRI NET SALES of a COMBINATION PRODUCT by either party shall be downwardly
adjusted by mutual agreement of the parties from the royalties provided above,
taking into account the relative selling prices of the components of the
COMBINATION PRODUCT derived independently to this Agreement if sold separately,
or if not sold separately market value and costs of the components of the
COMBINATION PRODUCT derived independently of this Agreement.
ARTICLE 6
ROYALTY REPORTS AND ACCOUNTING
6.1 SB shall keep and require its licensees to keep complete and
accurate records of all sales of SB PRODUCT under the licenses granted herein.
VRI shall have the right, at VRI's expense, through a certified public
accountant or like person reasonably acceptable to SB, to examine such records
during regular business hours during the life of this Agreement and for six (6)
months after its termination; provided, however, that such examination shall
17
<PAGE> 20
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
not take place more than once a year and shall not cover such records for more
than the preceding two (2) years and provided further that such accountant
shall report to VRI only as to the accuracy of the royalty statements and
payments.
6.2 Within sixty (60) days after the close of each calendar
quarter, SB shall deliver to VRI a true accounting of all SB PRODUCT sold by SB
and its licensees during such quarter and shall at the same time pay all
royalties due. Such accounting shall show sales on a country-by country and SB
PRODUCT-by-SB PRODUCT basis.
6.3 Any tax, duty or other levy on VRI paid or required to be
withheld by SB for the benefit of VRI on account of royalties payable to VRI
under this Agreement shall be deducted from the amount of royalties otherwise
due. SB shall secure and send to VRI proof of any such taxes, duties or other
levies withheld and paid by SB or its licensees for the benefit of VRI.
6.4 All royalties and other payments due under this Agreement
shall be payable in U.S. Dollars. If governmental regulations prevent
remittances from a foreign country with respect to sales made in that country,
the obligation of SB to pay royalties on sales in that country shall be
suspended until such remittances are possible. [****]
6.5 In the case of SB, monetary conversion from the currency of a
foreign country, in which SB PRODUCT is sold, into U.S. currency shall be
calculated at the actual average rates of exchange for the year to date as used
by SB in producing its quarterly and annual accounts, as confirmed by SB's
auditors. In the case of VRI, monetary conversions from the currency of a
foreign country, in which VRI PRODUCT is sold, into U.S. currency shall be made
at the of official exchange rate in force in that country for financial
transactions on the last business day of the calendar quarter for which the
royalties are being paid. If there is no such of official exchange rate, the
conversion shall be made at the rate for such remittances on that date as
certified by Citibank, N.A., New York, New York, U.S.A..
6.6 In any situation where VRI incurs a royalty obligation to SB
under this Agreement, unless otherwise agreed, the requirements of this Article
6 applicable to the reporting and payment of royalties by SB shall be
applicable mutatus mutandis to the reporting and payment of royalties by VRI.
18
<PAGE> 21
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
ARTICLE 7
DEVELOPMENT
7.1 SB Development.
(a) SB agrees to use reasonable efforts: to select SB
TARGET GENES; to develop screens based on SB TARGET GENES and to perform
research to identify an SB
PRODUCT in the SB FIELD OF USE and to have such SB PRODUCT achieve SB
DEVELOPMENT STATUS.
(b) SB shall have full control and authority over
research, development, registration and commercialization of SB PRODUCT in the
TERRITORY. SB will exercise its reasonable efforts and diligence in developing
and commercializing such SB PRODUCT(S) in the SB FIELD OF USE in accordance
with its reasonable business, legal, medical and scientific judgment and in
undertaking investigations and actions required to obtain appropriate
governmental approvals to market such SB PRODUCT in the SB FIELD OF USE in the
TERRITORY. All such activity shall be undertaken at SB's expense.
7.2 Reporting. SB shall keep VRI informed of progress of SB's
efforts to develop and commercialize such SB PRODUCT in the SB FIELD OF USE and
shall provide half-yearly reports in this respect.
7.3 VRI Development. In any situation where VRI undertakes
development of a VACCINE PRODUCT in the VRI FIELD OF USE under this Agreement,
unless otherwise agreed, the requirements of sections 7.1(a), 7.1(b), and 7.2
applicable to SB PRODUCT development in the SB FIELD OF USE by SB shall be
applicable mutatus mutandis to VACCINE PRODUCT development by VRI in the VRI
FIELD OF USE.
7.4 Right of First Negotiation.
[****]
19
<PAGE> 22
ARTICLE 8
EXCHANGE OF INFORMATION AND CONFIDENTIALITY
8.1 Promptly after the COMMENCEMENT DATE, VRI shall disclose and
supply to SB all VRI TECHNOLOGY necessary for SB to conduct its portion of the
RESEARCH PROGRAM. Thereafter, each party shall promptly disclose and supply to
the other any further VRI TECHNOLOGY or SB RP TECHNOLOGY respectively, as may
be reasonably required for each party to fulfill its obligations and exercise
its rights under this Agreement.
8.2 During the term of this Agreement and for ten (10) years
thereafter, VRI and SB shall not use or reveal or disclose to THIRD PARTIES any
confidential information received from the other party without first obtaining
the written consent of the disclosing party, except as may be otherwise
provided herein, or as may be required for purposes of investigating,
developing, manufacturing or marketing PRODUCT or for securing essential or
desirable authorizations, privileges or rights from governmental agencies, or
as may be required to be disclosed to a governmental agency or as may be
necessary to file or prosecute patent applications concerning PRODUCT or to
carry out any litigation concerning PRODUCT or as may be necessary to exercise
its rights under Article 2. This confidentiality obligation shall not apply to
such information which is or becomes a matter of public knowledge, or is
already in the possession of the receiving party, or is disclosed to the
receiving party by a THIRD PARTY having the right to do so and without an
obligation of confidentiality, or is subsequently and independently developed
by employees of the receiving party or AFFILIATES thereof who had no knowledge
of the confidential information disclosed, or is required by law to be
disclosed. The parties shall take reasonable measures to assure that no
unauthorized use or disclosure is made by others to whom access to such
information is granted.
8.3 Nothing herein shall be construed as preventing either party
from disclosing any information received from the other to an AFFILIATE,
licensee or distributor of the party, provided, in the case of a licensee or
distributor, such licensee or distributor has undertaken a similar obligation
of confidentiality with respect to the confidential information.
8.4 All confidential information disclosed by one party to the
other shall remain the intellectual property of the disclosing party. In the
event that a court or other legal or administrative tribunal, directly or
through an appointed master, trustee or receiver, assumes partial or complete
control over the assets of a party to this Agreement based on the insolvency or
bankruptcy of such party, the bankrupt or insolvent party shall promptly notify
the court or other tribunal (i) that confidential information received from the
other party under this Agreement remains the property of the other party and
(ii) of the confidentiality obligations under this Agreement. In addition, the
bankrupt or insolvent party shall, to the extent permitted by law, take all
steps necessary or desirable to maintain the confidentiality of the other
party's confidential information and to insure that the court, others tribunal
or
20
<PAGE> 23
appointee maintains such information in confidence in accordance with the terms
of this Agreement.
8.5 No public announcement or other disclosure to THIRD PARTIES
concerning the existence of or terms of this Agreement shall be made, either
directly or indirectly, by any party to this Agreement without first obtaining
the approval of the other party and agreement upon the nature and text of such
announcement or disclosure. The party desiring to make any such public
announcement or other disclosure shall inform the other party of the proposed
announcement or disclosure in reasonably sufficient time prior to public
release, and shall provide the other party with a written copy thereof, in
order to allow such other party to comment upon such announcement or
disclosure. The permission of the other party shall not be required with
respect to a public announcement or disclosure of subject matter which has been
disclosed in a previously approved announcement or disclosure. When such
announcement or disclosure may be legally required or as may be required for
recording purposes or as may be required for an offering of securities and/or
to obtain financing and/or in connection with sublicensing and/or in
connection, with an acquisition and/or transfer of assets and/or a merger or
consolidation, a party may disclose information as required by applicable law,
regulation or judicial process, provided that such party shall give the other
party prior written notice thereof and adequate opportunity to object to,
and/or to redact any such disclosure or to request confidential treatment
thereof. To the extent that a party is required to disclose to or provide its
licenser a copy of this Agreement as a result of granting to the other party a
sublicense under this Agreement, such party shall have the right to disclose
and/or provide a copy of this Agreement to such licenser. To the extent
permissible, the nondisclosing party shall have the right to redact any such
disclosure and to request confidential treatment thereof.
8.6 Neither VRI nor SB shall submit for written or oral
publication any manuscript, abstract or the like which includes data or other
information relating to RESEARCH PROGRAM OUTPUT, SB TARGET GENE, SB VACCINE
GENE, VRI TARGET GENE or VRI VACCINE until 18 months after the filing date of a
PATENT disclosing and claiming same without first obtaining the prior written
consent of the other party, which consent shall not be unreasonably withheld.
The contribution of each party shall be noted in all publications or
presentations by acknowledgment or coauthorship, whichever is appropriate.
8.7 Nothing in this Agreement shall be construed as preventing or
in any way inhibiting either party from complying with statutory and regulatory
requirements governing the development, manufacture, use and sale or other
distribution of PRODUCT in any manner which it reasonably deems appropriate,
including, for example, by disclosing to regulatory authorities confidential or
other information received from the other party.
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<PAGE> 24
ARTICLE 9
PATENTS AND TRADEMARKS
9.1 Each party shall have and retain sole and exclusive title to
all inventions, discoveries, designs, works of authorship and other know-how
which are made, conceived, reduced to practice or generated by its employees,
agents, or other persons acting under its authority including, but not limited
to those directed to a RESEARCH PROGRAM OUTPUT or a PRODUCT, the discovery and
screening of same and any process or use relating thereto made during and as a
result of the RESEARCH PROGRAM. Each party shall own a fifty percent (50%)
undivided interest in all such inventions, discoveries, designs, works of
authorship and other know-how made, conceived, reduced to practice or generated
jointly by employees, agents, or other persons acting under the authority of
both parties.
9.2 VRI shall have the first right, using in-house or outside
legal counsel selected at VRI's sole discretion, to prepare, file, prosecute,
maintain and extend PATENTS owned by VRI ("VRI PATENT") in countries of VRI's
choosing, and VRI shall bear all costs relating to such activities which occur
at VRI's request or direction. If VRI, prior or subsequent to filing VRI
PATENTS or applications for other forms of intellectual property, elects not to
prepare, file, prosecute or maintain certain of such VRI PATENTS or certain
claims encompassed within such VRI PATENTS, or such other forms of intellectual
property, in one or more countries, VRI shall give SB notice thereof within a
reasonable period prior to allowing such patents, claims or other forms of
intellectual property, to lapse or become abandoned or unenforceable, and SB
shall thereafter have the right, at its sole expense, to prepare, file,
prosecute, and maintain such VRI PATENTS or divisional patent applications
related to such certain claims, or such other forms of intellectual property to
which SB is licensed under this Agreement, in such one or more countries.
9.3 SB shall have the first right, using in-house or outside legal
counsel selected at SB's sole discretion, to prepare, file, prosecute, maintain
and extend PATENTS owned by SB ("SB PATENTS") in countries of SB's choosing,
and SB shall bear all costs relating to such activities which occur at SB's
request or direction. If SB, prior or subsequent to filing SB PATENTS, or
applications for other forms of intellectual property, elects not to prepare,
file, prosecute or maintain certain of such SB PATENTS or certain claims
encompassed within such SB PATENTS, or such other forms of intellectual
property, in one or more countries, SB shall give VRI notice thereof within a
reasonable period prior to allowing such patents, claims or other forms of
intellectual property to lapse or become abandoned or unenforceable, and VRI
shall thereafter have the right, at its sole expense, to prepare, file,
prosecute, and maintain such SB PATENTS or divisional patent applications
related to such certain claims,
22
<PAGE> 25
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
or such other forms of intellectual property to which VRI is licensed under
this Agreement, in such one or more countries. [****]
9.4 SB shall have the first right, using in-house or outside legal
counsel selected at SB's sole discretion, to prepare, file, prosecute, maintain
and extend patent applications and patents concerning all jointly owned SB and
VRI inventions in countries throughout the world in accordance with the
relevant legal requirements, for which SB shall bear the costs relating to such
activities which occur at SB's request or direction. If SB, prior or
subsequent to filing certain patent applications on any inventions or
discoveries which are owned jointly by SB and VRI, elects not to file,
prosecute or maintain such patent applications or ensuing patents or certain
claims encompassed by such patent applications or ensuing patents in any
country of the TERRITORY, SB shall give VRI notice thereof within a reasonable
period prior to allowing such patent applications or patents or such certain
claims encompassed by such patent applications or patents to lapse or become
abandoned or unenforceable, and VRI shall thereafter have the right from the
date of said notice, at its sole expense, to prepare, file, prosecute and
maintain patent applications and patents or divisional applications related to
such certain claims encompassed by such patent applications or patents
concerning all such inventions and discoveries in countries of its choice
throughout the world. The party filing, prosecuting or maintaining such patent
application shall give the other party a reasonable advance opportunity to
review and comment upon the text of the application before filing and important
prosecution matters relating thereto, and in good faith shall consider and
incorporate the reasonable requests and comments of the other party. The party
filing the application shall supply the other party with a copy of the
application as filed, together with notice of its filing date and serial
number.
9.5 Each party, on behalf of itself and its directors, employees,
officers, shareholders, agents, successors and assigns hereby waives any and
all actions and causes of action, claims and demands whatsoever, in law or
equity of any kind it or they may have against the other party, its officers,
directors, employees, shareholders, agents, successors and assigns, which may
arise in any way in the performance of patent activities under this Section,
except as a result of gross negligence, recklessness or willful misconduct.
9.6 Each party, as the case may be, shall disclose to each other
the complete texts of all SB PATENTS and VRI PATENTS to which they are licensed
hereunder, as well as all information received concerning the institution or
possible institution of any interference, opposition, re-examination, reissue,
revocation, nullification or any official proceeding involving such VRI PATENT
or SB PATENT anywhere in the world. Each party shall have the right to review
all such pending applications and other proceedings and make recommendations
concerning them and their conduct. Each party shall keep the other promptly
and fully informed of the course of patent prosecution or other proceedings
23
<PAGE> 26
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
including by providing the other party with copies of important, substantive
communications, search reports and third party observations submitted to or
received from patent offices throughout the world. The parties shall hold all
information disclosed to it under this section as confidential subject to the
provisions of Article 8. This Section does not pertain to SB PATENTS directed
to SB PRODUCT.
9.7 In the event of the institution of any suit by a THIRD PARTY
against VRI, SB or its sublicensees for patent infringement involving the
manufacture, use, sale, distribution or marketing of PRODUCT, the party sued
shall promptly notify the other party in writing. The other party shall have
the right but not the obligation to defend or participate in the defense of
such suit at its own expense. VRI and SB shall assist one another and
cooperate in any such litigation at the other's request without expense to the
requesting party.
9.8 In the event that VRI or SB becomes aware of actual or
threatened infringement of a SB PATENT or VRI PATENT to which it is licensed by
the other party anywhere in the TERRITORY, that party shall promptly notify the
other party in writing. The owner of such SB PATENT or VRI PATENT or SB in the
case of jointly owned PATENTS shall have the first right but not the obligation
to bring, at its own expense, an infringement action against any THIRD PARTY
and to use the other party's name in connection therewith. If the owner of the
patent does not commence a particular infringement action within ninety (90)
days, the other party, after notifying the owner in writing, shall be entitled
to bring such infringement action at its own expense. The party conducting
such action shall have full control over its conduct, including settlement
thereof provided such settlement shall not be made without the prior written
consent of the other party if it would adversely affect the patent rights of
the other party. In any event, VRI and SB shall assist one another and
cooperate in any such litigation at the other's request without expense to the
requesting party. VRI shall have no right to bring an infringement action in
respect of any SB PATENTS directed to a PRODUCT other than a VACCINE PRODUCT or
a VRI PRODUCT.
9.9 VRI and SB shall recover their respective actual out-of-pocket
expenses, or equitable proportions thereof, associated with any litigation or
settlement thereof from any recovery made by any party. [****]
9.10 The parties shall keep one another informed of the status of
and of their respective activities regarding any such litigation or settlement
thereof.
9.11 A party who is developing, selling or planning to sell a
PRODUCT covered by a patent licensed under this Agreement shall have the sole
right to seek to obtain extensions of or SPCs based on such licensed patents.
If a party exercises such right, then the other party
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<PAGE> 27
shall assist the party seeking the extensions including by authorizing the
other party to act as its agent.
9.12 All rights and licensing granted under or pursuant to this
Agreement by VRI to SB, or vice versa, are, and shall irrevocably be deemed to
be, "intellectual property" as defined in Section 101(56) of the Bankruptcy
Code. In the event of the commencement of a case by or against either party
under any Chapter of the Bankruptcy Code, this Agreement shall be deemed an
executory contract and all rights and obligations hereunder shall be determined
in accordance with Section 365(n) thereof. Unless a party rejects this
Agreement and the other party decides not to retain its rights hereunder, the
other party shall be entitled to a complete duplicate of (or complete access
to, as appropriate) all intellectual property and all embodiments of such
intellectual property held by the party and the party shall not interfere with
the rights of the other party, which are expressly granted hereunder, to such
intellectual property and all embodiments of such intellectual property from
another entity. Further, this Agreement shall be deemed, upon presentation to
another entity, to be the same as an express instruction by the party to such
other entity to provide such intellectual property and all embodiments of such
intellectual property directly to the other party. Without limiting the
foregoing provisions in this Section, the other party shall be entitled to all
post-bankruptcy-petition improvements, updates, or developments of intellectual
property created hereunder. If such intellectual property is not fully
developed as of the commencement of any bankruptcy case, The other party shall
have the right to complete development of the property.
9.13 Each party shall make available to the other party or its
authorized attorneys, agents or representatives, its employees, agents or
consultants necessary or appropriate to enable the appropriate party to file,
prosecute and maintain VRI PATENTS and SB PATENTS for a period of time
sufficient for such party to obtain the assistance it needs from such
personnel. Where appropriate, each party shall sign or cause to have signed
all documents relating to said patent applications or patents at no charge to
the other.
9.14 In any action brought pursuant to Section 9.8, the party
bringing the action shall indemnify the other party, its officers, directors,
shareholders, employees, agents, successors and assigns from any loss, damage
or liability, including for attorney's fees and costs, which may result from
claims, counterclaims or crossclaims asserted by a defendant, except to the
extent that such losses, damages or liabilities result from the negligence or
willful misconduct of the other party.
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
9.15 Trademarks:
9.15.1 Each party shall be responsible for the selection of
all trademarks and tradenames which are employed in connection with any PRODUCT
sold by it under this Agreement. Nothing in this Agreement shall be construed
as a grant of rights, by license or otherwise, to VRI or SB to use such
trademarks and tradenames or any other trademarks and tradenames owned by SB or
VRI, respectively, for any purpose.
9.15.2 Nothing in this Agreement shall be construed as a
grant of rights, by license or otherwise, to either party, to use the name of
the other party or any entity affiliated therewith for any purpose whatsoever
except as may otherwise be expressly provided for in this Agreement.
9.15.3 Each party, at its expense, shall be responsible for
the selection and registration of non-proprietary names for PRODUCT in the
TERRITORY which it sells under this Agreement.
ARTICLE 10
TERM AND TERMINATION
10.1 The RESEARCH PROGRAM shall terminate two (2) years from the
COMMENCEMENT DATE unless extended pursuant to section 2.3 or earlier terminated
pursuant to section 2.2.
10.2 Royalty obligations under Article 5 in each country of the
TERRITORY shall expire with respect to each PRODUCT
(a) with respect to SB, upon the later of:
[****]
(b) with respect to VRI, upon the later of:
[****]
Upon termination of a party's obligation to pay royalties with
respect to a PRODUCT in a country under this Section 10.2, such party shall
have a fully paid-up, non-exclusive license with respect to such PRODUCT in
such country.
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<PAGE> 29
The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
10.3 Unless otherwise terminated, this Agreement shall remain in
full force and effect until neither party is obligated to make any further
payments to the other party under this Agreement.
10.4 (a) If either party fails or neglects to perform
covenants or provisions of this Agreement and if such default is not corrected
within sixty (60) days after receiving written notice from the other party with
respect to such default, such other party shall have the right to terminate
this Agreement by giving written notice to the party in default provided the
notice of termination is given within six (6) months of the default and prior
to correction of the default.
(b) If this Agreement is properly terminated by VRI under
this Section 10.4, then all amounts which would have been due to VRI under
Section 2.2 for the two quarterly payments following the date of termination
shall be immediately due and payable.
10.5 Either party may terminate this Agreement if, at any time, the
other party shall file in any court or agency pursuant to any statute or
regulation of any state or country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of a receiver
or trustee of the party or of its assets, or if the other party proposes a
written agreement of composition or extension of its debts, or if the other
party shall be served with an involuntary petition against it, filed in any
insolvency proceeding, and such petition shall not be dismissed with sixty (60)
days after the filing thereof, or if the other party shall propose or be a
party to any dissolution or liquidation, or if the other party shall make an
assignment for the benefit of creditors.
10.6 Notwithstanding the bankruptcy of VRI or SB, or the impairment
of performance by VRI or SB of its obligations under this Agreement as a result
of bankruptcy or insolvency of VRI or SB, the other party shall be entitled to
retain the licenses granted herein, subject to the rights of a party to
terminate this Agreement for reasons other than bankruptcy or insolvency as
expressly provided in this Agreement.
ARTICLE 11
RIGHTS AND DUTIES UPON TERMINATION
11.1 Upon termination of this Agreement, each party shall have the
right to retain any sums already paid by the other hereunder and each party
shall pay to the other all sums accrued hereunder which are then due, [****]
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<PAGE> 30
11.2 Termination of this Agreement shall terminate all outstanding
obligations and liabilities between the parties arising from this Agreement
other than those previously accrued except those described in Sections 4.4,
4.5, 6.1, 9.5, 9.14 and 14.1 and Articles 8, 11 and 16 through 21. In
addition, any other provision required to interpret and enforce the parties'
rights and obligations under this Agreement shall also survive, but only to the
extent required for the full observation and performance of this Agreement.
11.3 Termination of the Agreement in accordance with the provisions
hereof shall not limit remedies which may be otherwise available in law or
equity.
ARTICLE 12
WARRANTIES AND REPRESENTATIONS
12.1 Each party warrants and represents that it has the right to
enter into this Agreement and to perform in accordance therewith.
12.2 Nothing in this Agreement shall be construed as a warranty
that PATENTS are valid or enforceable or that their exercise does not infringe
any patent rights of THIRD PARTIES.
12.3 Each party further warrants and represents that it has not, up
through and including the date of this Agreement, omitted to furnish the other
with any information concerning the subject matter of this Agreement which
would be material to its decision to enter into this Agreement and to undertake
the commitments and obligations set forth herein.
ARTICLE 13
FORCE MAJEURE
13.1 If the performance of any part of this Agreement by either
party, or of any obligation under this Agreement other than a payment
obligation, is prevented, restricted, interfered with or delayed by reason of
any cause beyond the reasonable control of the party liable to perform, unless
conclusive evidence to the contrary is provided, the party so affected shall,
upon giving written notice to the other party, be excused from such performance
to the extent of such prevention, restriction, interference or delay, provided
that the affected party shall use its reasonable efforts to avoid or remove
such causes of non-performance and shall continue performance with the utmost
dispatch whenever such causes are removed. When such circumstances arise, the
parties shall discuss what, if any, modification of the terms of this Agreement
may be required in order to arrive at an equitable solution.
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ARTICLE 14
GOVERNING LAW
14.1 This Agreement shall be deemed to have been made in the
Commonwealth of Pennsylvania and its form, execution, validity, construction
and effect shall be determined in accordance with the laws of the Commonwealth
of Pennsylvania, USA.
ARTICLE 15
WAIVER OR BREACH
15.1 The failure of either party at any time or times to require
performance of any provision hereof shall in no manner affect its rights at a
later time to enforce the same. No waiver by either party of any condition or
term in any one or more instances shall be construed as a further or continuing
waiver of such condition or term or of another condition or term.
ARTICLE 16
SEPARABILITY
16.1 In the event any portion of this Agreement shall be held
illegal, void or ineffective, the remaining portions hereof shall remain in
full force and effect.
16.2 If any of the terms or provisions of this Agreement are in
conflict with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to conform with such statute or
rule of law.
16.3 In the event that the terms and conditions of this Agreement
are materially altered as a result of Sections 16.1 or 16.2, the parties will
renegotiate the terms and conditions of this Agreement to resolve any
inequities.
ARTICLE 17
ENTIRE AGREEMENT
17.1 This Agreement, into as of the date written above, constitutes
the entire Agreement between the parties relating to the subject matter hereof
and supersedes all previous writings and understandings. No terms or
provisions of this Agreement shall be varied or modified by any prior or
subsequent statement, conduct or act of either of the
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parties, except that the parties may amend this Agreement by written
instruments specifically referring to and executed in the same manner as this
Agreement.
ARTICLE 18
NOTICES
18.1 Any notice required or permitted under this Agreement shall be
sent by air mail, postage pre-paid, to the following addresses of the parties:
VRI: Virus Research Institute
61 Moulton Street
Cambridge, MA 02138
Attn: Chief Executive Officer
SB: SmithKline Beecham plc.
New Horizons Court, Brentford,
Middlesex TW8 9EP, England
Attn: Director and Senior Vice President
Worldwide Business Development
copy to: SmithKline Beecham Corporation
709 Swedeland Road
P.O. Box 1539
King of Prussia, PA 19406
Attention: Corporate Intellectual
Property-US
18.2 Any notice required or permitted to be given concerning this
Agreement shall be effective upon receipt by the party to whom it is addressed
or within seven (7) days of dispatch whichever is earlier.
ARTICLE 19
ASSIGNMENT
19.1 This Agreement and the licenses herein granted shall be
binding upon and inure to the benefit of the successors in interest of the
respective parties. Neither this Agreement nor any interest hereunder shall be
assignable by either party without the written consent of the other provided,
however, that either party may assign this Agreement and/or any part of its
rights and obligations hereunder, and/or any PATENT owned by it, (i) to any
AFFILIATE or (ii) to any corporation with which a party may merge or
consolidate, or to which it may
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transfer all or substantially all of its assets to which this Agreement
relates, without obtaining the consent of the other party.
ARTICLE 20
RECORDING
20.1 SB shall have the right, at any time, to record, register, or
otherwise notify this Agreement in appropriate governmental or regulatory
offices anywhere in the TERRITORY, and VRI shall provide reasonable assistance
to SB in effecting such recording, registering or notifying.
ARTICLE 21
INDEMNIFICATION
21.1 SB shall defend, indemnify and hold harmless VRI, AFFILIATES
of VRI, licensees of VRI and their respective directors, officers,
shareholders, agents and employees, from and against any and all liability,
loss, damages and expenses (including reasonable attorneys' fees) as the result
of claims, demands, costs or judgments which may be made or instituted against
any of them arising out of any SB PRODUCT which was manufactured, possessed,
distributed, used, tested, sold or otherwise disposed of by or through SB or
its sublicensees. SB's obligation to defend, indemnify and hold harmless shall
include claims, demands, costs or judgments, whether for money damages or
equitable relief by reason of alleged personal injury (including death) to any
person or alleged property damage, provided, however, the indemnity shall not
extend to any clams against an indemnified party which result from the gross
negligence or willful misconduct of such indemnified party. SB shall have the
exclusive right to control the defense of any action which is to be indemnified
in whole by SB hereunder, including the right to select counsel acceptable to
VRI to defend VRI and to settle and claim, provided that, without the written
consent of VRI (which shall not be unreasonably withheld or delayed), SB shall
not agree to settle any claim against VRI to the extent such claim has a
material adverse effect on VRI. The provisions of this Section shall be
applicable whether or not such claim has been rightfully brought and shall
survive and remain in full force and effect after any termination, expiration
or cancellation of this Agreement.
21.2 VRI shall defend, indemnify and hold harmless SB, AFFILIATES
of SB, licensees of SB and their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages and
expenses (including reasonable attorneys' fees) as the result of claims,
demand, costs or judgments which may be made or instituted against any of them
arising out of any VRI PRODUCT which was manufactured, possessed, distributed,
used, tested, sold or otherwise disposed of by or through VRI or its AFFILIATES
or sublicensees. VRI's obligation to defend, indemnify and hold harmless shall
include claims, demands, costs or judgments, whether for money damages or
equitable relief
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by reason of alleged personal injury (including death) to any person or alleged
property damage, provided, however, the indemnity shall not extend to any
claims against an indemnified party which results from the gross negligence or
willful misconduct of such indemnified party. VRI shall have the exclusive
right to control the defense of any action which if to be indemnified in whole
by VRI hereunder, including the right to select counsel acceptable to SB to
defend SB and to settle any claim, provided that, without written consent of SB
(which shall not be unreasonably withheld or delayed), VRI shall not agree to
settle any claim against SB to the extent such claim has a material adverse
effect on SB. The provisions of this Section shall be applicable whether or
not such claim has been rightfully brought and shall survive and remain in full
force and effect after any termination, expiration or cancellation of this
Agreement.
21.3 A person or entity that intends to claim indemnification under
this Section 21 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any loss, claim, damage, liability or action in respect of
which the Indemnitee intends to claim such indemnification, and the Indemnitor,
after it determines that indemnification is required of it, shall assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an Indemnitee shall have the right to retain its own counsel,
with the fees and expenses to be paid by the Indemnitor if Indemnitor does not
assume the defense; or, if representation of such Indemnitee by the counsel
retained by the Indemnitor would be inappropriate due to actual or potential
differing interests between such Indemnitee and any other party represented by
such counsel in such proceedings. The indemnity agreement in Section 21 shall
not apply to amounts paid in settlement of any loss, claim, damage, liability
or action if such settlement is effected without the consent of the Indemnitor,
which consent shall not be withheld unreasonably. The failure to deliver
notice to the Indemnitor with a reasonable time after the commencement of any
such action, if prejudicial to its ability to defend such action, shall relieve
such Indemnitor of any liability to the Indemnitee under this Section 21, but
the omission so to deliver to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Section
21. The Indemnitee under this Section 21, its employees and agents, shall
cooperate fully with the Indemnitor and its legal representatives in the
investigations of any action, claim or liability covered by this
indemnification. In the event that each party claims indemnity from the other
and one party is finally held liable to indemnify the other, the Indemnitor
shall additionally be liable to pay the reasonable legal costs and attorneys'
fees incurred by the Indemnitee in establishing its claim for indemnity.
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IN WITNESS WHEREOF, the parties, through their authorized officers,
have executed this Agreement as of the date first written above.
SMlTHKLINE BEECHAM plc
BY: /s/ Jean Pierre Garnier
---------------------------------------
Jean Pierre Garnier
Title: Chairman. Pharmaceuticals
------------------------------------
VIRUS RESEARCH INSTITUTE INC.
BY: /s/ J. Barrie Ward
---------------------------------------
J. Barrie Ward
Title: Chairman and Chief Executive Officer
------------------------------------
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
APPENDIX A
PATENTS
[****]
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
APPENDIX B
VRI/SB [****] RESEARCH PLAN
[****]
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
APPENDIX C
VRI THIRD PARTY AGREEMENTS
[****]
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The information below marked by [****] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed with
the Commission.
APPENDIX D
KNOWN [****] GENES AND SEQUENCES
[****]
37
